 The topic I want to talk about today is Bitcoin neutrality Bitcoin neutrality. What does Bitcoin neutrality mean? Neutrality in Bitcoin means being able to adopt Bitcoin in any culture any language any religion any geography but also any political or economic system So Bitcoin neutrality is about making Bitcoin a standard that is independent of your desires and expectations This isn't a Libertarian currency any more than it's a communist currency It's a currency and it can be applied to any political system Whether it is The political system you like or not It's a neutral currency So what does neutrality mean? Neutrality doesn't mean no principles Neutrality is a principle in itself and in fact What I'm here to talk to you about today is the neutrality is the most important principle in Bitcoin and most of the other great things Derived from that if you want to really understand how neutrality will affect Bitcoin in the future We need to look at what has happened with the internet and TCP IP in terms of neutrality on the internet anyone can publish With the same voice that time water and CBS and ABC and CNN have So neutrality is about being able to balance things so that it doesn't matter who the sender is or the recipient is How big the transaction is what type of transaction it is whether it's buying gold camels or drugs Neutrality means that the network will process your transaction and will charge you Based on how big that transaction is in the blockchain Great, we all understand we have that principle today What I want to talk about is how important that principle is how fragile that principle is and how quickly people are going to try to co-opt and pervert that principle and We've traveled this journey already on the internet. We started out with a completely neutral IP protocol that allowed us to have that equality of voice across any channel and in comparison to any other website and Then the internet got popular and the first thing that people started attacking was the concept of neutrality Right because if you're already at the top of the ladder The first thing you do is pull up the ladder behind you You sure don't want the little people down there climbing it too Neutrality as a principle is built into Bitcoin today But it will only survive if it is vigorously defended and there will be plenty opportunities to defend it because it will be attacked So let's talk a bit about the specifics What is neutrality how it applies in different contexts? Let's talk about how neutrality will be attacked and then finally I'll wrap it up by talking about Why neutrality is important if we want to see adoption of Bitcoin rapid adoption of Bitcoin? Again, the slides will be available as part of the video. So feel free to pick those up after the presentation I'm not going to torment you with PowerPoint So first neutrality, what does that mean? we tend to think of Bitcoin in the terms of our own personal experience and As far as I can tell most of people here come from a first-walled economy probably this first-walled economy and They have a certain experience with currency and that experience is not normative That is not the experience of the world Everyone in this room uses the world's reserve currency. No one else gets to use the world's reserve currency right so We need to understand that adoption of Bitcoin won't necessarily happen here and my argument is in Fact here is the last place where Bitcoin will broadly be adopted And that's why neutrality is important because if you are living and breathing a first world structured rule of law easily Negotiated contractual obligations and resolutions for a justice system that actually works sometimes But certainly works better than most countries a country where cross-border transactions are handled in an Regularly efficient way where you can move currency around and you can interact with the rest of the world Bitcoin may not be that big a deal for you If you live within a hundred miles of the border between Kenny and Tanzania You regularly transact in four currencies the Kenyan currency the Tanzanian currency the euro and the US dollar You're used to not having a bank account. You're used to carrying sacks of money You're used to having floating exchange rates Governments that prey on your currency and dilute it so your expectations are very different My argument today is the neutrality boosts adoption because it allows Everyone in the world to quickly and rapidly adopt Bitcoin Let's give you some examples Classic example you can look up is the Islamic Bank of Bitcoin Islamic Bank of Bitcoin was created to enable the use of Bitcoin within the Sharia law finance system and under Sharia law Interest payments are considered usury or usury. I'm not sure how to pronounce that, but you know what I mean It's exploitation to charge interest. It's forbidden in the Quran So banks in the Islamic world do not charge interest what they do instead and This is a bit kind of a Semantic thing, but they enter into joint ventures with companies that they're offering loans to and then they collect Dividends back and those dividends have a specific dividend schedule, which might be say a 3% every year dividend Smells like interest walks like interests But the important thing is that there are certain rules and regulations is how to use currency in an Islamic system And that's not the only culture out there that has its own particular perspective on how money should be used. I worked for many years in New York and A good number of my colleagues were Orthodox Jewish and They observed the Sabbath So I knew very well there were not going to be any conference calls on a Saturday because they don't use electronic and electrical equipment on the Sabbath Can Bitcoin be adopted today in a culture where the Sabbath is followed religiously That may have been a unintended pun Can it be adopted in that environment only if you have a means of exchange? It doesn't depend on electricity and we need to think about that And if the Sabbath is a bit of a problem think about sub-Saharan Africa where you don't have electricity We're not having electricity is the norm if the lights went out right now Everyone would get up and head for the exits. I was doing a presentation in Bangalore. I was on stage the lights went out The fire alarm started ringing. No one got up. I was ready to organize and massive evacuation They knew that this was just Tuesday Because that's what happens in Bangalore power goes out it Tuesday and it's a perfectly normal thing So in some cultures you have Expectations we have expectations in this culture We assume that our money will have a certain value that it will be the world reserve that we can do interbank transfers And these assumptions are very very rare Neutrality in Bitcoin means being able to address the rest of the world Because at the end of the day, it's not about us. It's about the other six billion So can we create a currency that is neutral towards religion and can be readily adopted in Any religious system can we create a currency that is neutral towards geography? Towards language and even towards connectivity whether you have it or not Electricity whether you have it or not So these are the core concepts that leads to greater adoption, but they're also the things that spur innovation because if you make it easily easy for People to adopt the currency and they look at the currency and see it as a neutral Technocratic Scientifically based currency It doesn't offend their religion. It doesn't offend their culture. It's not contradictory to their values It is compatible with their language. They can readily adopt it Now why do I care about ready adoption of Bitcoin in other countries? Because that's where it's gonna happen We get caught up in understanding Bitcoin in reference to our currency Which is the US dollar here and in most of Western Europe two currencies that are relatively stable So if you had a hierarchy of currency, here's the US dollar the world reserve currency relatively stable over decades or even longer, right? and Here's the Zimbabwe dollar. I Have a beautiful picture in the presentation which shows is in Bob a 100 trillion dollar bill and You can go online and search and see people buying coffee with a stack of money this tall so if you're American and you ask yourself is Bitcoin better than the dollar 99% of people are gonna answer no If you're Zimbabwean and you ask is Bitcoin better than the Zimbabwe dollar Goat poo is better than the Zimbabwe dollar as a trading mechanism as a transaction Even as a store value at least you can burn it and make fire right So we really have to understand that there's a completely different level of comparison in Within our context and within the global context So if you think of that hierarchy of currencies, where does Bitcoin fall? Probably in terms of utility, it's better than 20 currencies in the world right now Maybe 30 currencies in the world. It's bigger than than about 15 world economies country economies already 1.7 billion and It's better than a lot of world currencies currencies that are crazy volatile. You think Bitcoin is volatile Not even close most of sub Saharan Africa would love to have the stability of Bitcoin So we need to understand that the comparison is different now Why is this topic really important because I see adoption happening in the form of punctuated equilibrium? We assume the Bitcoin is going to gradually get broader and broader and broader and broader over time until eventually It's toppled various currencies and becomes the world currency. That's not how it's going to happen Instead what you're going to see is a crisis perhaps something like Cyprus and You're going to see a massive conversion in a very limited geography Whole countries whole cities converting What are the requirements to massively convert to Bitcoin? There are four fundamental requirements The first one is relative utility or relative value. Is Bitcoin better than the piece of paper? My government makes and the answer for the US will be yes last It's the last currency where you can say that thing is yes Bitcoin will be better But every other currency is going to happen first, right? So utility is it better than what I currently have in my pocket to Will I get jailed or shot for holding Bitcoin? We don't think about that. There are plenty of countries in the world where if you do not have the currency You are a smuggler and there is no due process, right? So you get shot for holding Bitcoin. That's a bit of an impediment. We don't need to worry about that You know someone issues a suspicious activity report on us at least we can argue about it There's no suspicious activity report in Zimbabwe they shoot you right or maybe not Zimbabwe Maybe some other country these things happen. So can you safely hold Bitcoin? Is it worth more than the currency you currently have in your pocket? Do you have the technology within your country to adopt it? That's very critical, right? We all have smartphones. We have internet connectivity. We have always on internet connectivity. That is not the case. So I don't expect Bitcoin to be adopted in Zimbabwe not because it's not more valuable But simply because they don't have the means to be on the blockchain even occasionally Or even be with electricity occasionally in order to take advantage of Bitcoin at that level So utility or value Fear or lack of fear in the adoption of the currency and Technology do you have the necessary technology and the fourth one is neutrality Can I adopt that currency without violating some? Expectations of my culture some cultural norms some religious norms. Does it work with my language? Etc. Etc. Now we all focus on the features of Bitcoin making it easy to use that's really important But we have to think of these barriers because what they do is they provide that sweet spot Where all of these three things converge or these four things converge and suddenly? Bitcoin is a much better choice and when you reach tipping points in technology What happens is massive viral adoption? We've seen this with currencies like and Pesa which is essentially a transactional currency based on cell phone minutes Was it built as a transactional currency based on cell phone minutes? No It was for carriers to be able to sell cell phone minutes and people to move them between their family But it's convenient It maintains its value better than many currencies in sub-Saharan Africa So it became rapidly adopted because you could use it with simple non-smart cell phones Can we create the necessary conditions within Bitcoin so that when people are willing? unafraid Able through technology Bitcoin is the natural neutral global choice that they can put their trust in and If we create those conditions, then we can address the real potential of Bitcoin So let's look at what the real potential of Bitcoin is within that scenario Anybody want to hazard a guess as to how many people in the US do not have a bank account? 60 million yep It's somewhere between 15 and 20 percent depending on how its count is the fully unbanked population of this country That's an enormous number. Now. Do you think that's because these people don't have money? No Usually there's ten other reasons why people are unbanked it has to do with Regulatory issues, right? They don't have sufficient proof of identity. They don't have legal status in this country They don't have enough documentation They don't have enough money or enough cash flow through that bank account to make it worthwhile And so you have this completely parallel banking system, which in the US consists of payday loans short-term loans and Various other very exploitative vulture like capitalism systems that exploit the poor if You grasp for a moment that in the US 60 million people live under that banking regime Make the leap and realize six and a half billion people elsewhere Have never known anything, but that regime and that's Where Bitcoin wins? It's not about us Because the relative utility of Bitcoin to someone who's already banked who has a stable reserve currency is relatively small But once you start thinking about the great unbanked masses the question is How do we make it possible for them to adopt Bitcoin as quickly as possible? What are the preconditions? Let me suggest some of the answers One we need to be able to make Bitcoin usable Without constant access to the blockchain This is already possible in a number of ways You can do islands of Bitcoin that enable transactional Bitcoin within that island and occasionally sink back only the inflows and outflows into the blockchain This is already happening When you go on mount cox and you buy Bitcoin and you sell Bitcoin and you buy Bitcoin and you sell Bitcoin you buy Bitcoin Do you think they actually have that Bitcoin? Possibly, but they really only account for the Bitcoin you withdraw Right only that hits the blockchain. The rest of it is completely off blockchain transactions So can we do that on a more systematic basis for those countries and those environments where you don't have always on? Connections where you can transfer seven gigabytes over your internet connection in less than six months and Where if you start the download the problem isn't that your connection will flicker out The problem is that your city will flicker out as it does every afternoon at 2 p.m Because everyone turned on the air conditioning. This is a fact of life throughout the world Can we use Bitcoin in a non electricity environment even without cell phones? Yes, we can We can embed the value of Bitcoin in paper wallets and If those paper wallets are made tamper proof and are used as a means of exchange The paper wallets acquire face value that is related to the underlying value of Bitcoin essentially Bitcoin becomes The reserve currency of these paper wallets So you can actually build a full paper system of currency that is backed not by gold not by Floating exchange rates, but actually backed by proof-of-stake in Bitcoin and Enables you then to trade these bits of paper at a premium over face value. Who here has Cassatius coins anyone? Yeah Did you pay face value for them or did you pay a premium? You paid a premium They're worth more than the Bitcoin that's on them because they're pretty shiny objects and even more so now That Mike has stopped selling the coins to the public. They're pretty shiny objects. You can't buy anywhere except on eBay right Supply goes down price goes up And so by creating artificial scarcity Through proof-of-stake of Bitcoin you can make paper currencies that can be exchanged that a premium over face value and work as a Perfectly usable currency with a couple of really interesting exceptions. I Can't make backups of my money. I Can make backups of paper wallets Right No one can inflate my paper wallet money Like they can fiat money Right, so you can do a lot of interesting things with this while still maintaining the basic transactional capability We need to start thinking about using Bitcoin without electricity using Bitcoin over SMS Using Bitcoin by exchanging short phrases that are codes that unlock Bitcoin wallets by reference and So that kind of thinking leads us to create The exact right conditions so that when a country suffers a currency crisis The answer is not to put all of grandpa's money in a suitcase and head for the nearest border You see my name It's long and unpronounceable. It's Greek. I Know all about suitcases of money leaving a border My parents spent nine months Standing in line at a bank Transferring the maximum ten thousand euros a day Every single day with five thousand other people standing in line to do the same thing It's a can you imagine a bank run a run on the banks that last nine months like slow motion You saw this down, but we're sure as we're not leaving our money with you. We're gonna take it out slowly sure fine So you have every single family having Nikos standing in line in the morning Maria switches in the afternoon and So Costa's manages to get into the bank grab the ten thousand and wire it out of the country. I now run an Investment fund which is my parents retirement. I didn't want to do that, but we're not keeping it in euros in Greece People are accustomed to Conditions of extreme difficulty in the world and if we think about Bitcoin in the terms of a first world country We're missing this tremendous opportunity that exists around the world to elevate the other six and a half billion the great unbanked masses and To them this is a very compelling proposition because they're comfortable with extreme volatility They're comfortable with suitcases of money crossing the border they're comfortable with law that applies according to what the police person said And how much you bribed them? We're getting comfortable with that concept too But for most countries that's the reality So in summary Neutrality which is an underlying principle here is one of the four necessary conditions That are required in order to see worldwide rapid burst the adoption of the currency It's not about whether Bitcoin will be adopted or where it will be adopted or when it will be adopted The only question is will we be ready as the Bitcoin community for the influx of millions of people? For the use of Bitcoin in new scenarios at completely different transactional rates If you were here a couple of days ago at the giga on session a gentleman from India stood up and said hey I like your 0.001 transaction fee, but your micro transaction is sending a dollar my micro transaction is sending 10 rupees That's point one of a cent right whole different perspective Our micro transaction is a transaction in India their micro transaction doesn't have a word So we need to start thinking of scaling from femto transaction to giga transaction and a whole different concept of what pocket change means We need to be able to develop technology around Bitcoin that enables electricity less communication less transfer of value and Finally, we need to make sure that as we go forward and very many forces that are not Supporting Bitcoin because it's not in their interest as they try to pervert the core neutrality in the protocol We work hard to preserve those principles. So any time you see a change That is suggested in the Bitcoin code and the Bitcoin protocol in the Bitcoin payment systems Ask yourself this how does this change affect the core principle of neutrality? How do we make sure The neutrality as a principle is adopted so broadly that it can't easily be attacked in 1992 the internet had its AOL moment Those of us who are on the internet before call that Black Monday It was the day that AOL dumped 11 million noobs onto the internet And of course everyone who was already on the internet was absolutely horrified Because noobs didn't know about spam if they didn't know about net tickets and they did well, you know how it goes But that was an inevitable situation. It was an absolutely necessary thing in order to get the internet to mainstream What we managed to do on the internet was maintain the principle of neutrality long enough That it got as broadly distributed as it is today and now neutrality is baked into the system to a level where even if It's attacked the attacks fail and why do they fail? Because when you compare the value of a decentralized system to the value of a centralized system the decentralized system always wins It always delivers better value and better efficiency To everyone right centralized systems only benefit those who are at the center If we take the internet and make it broad Neutral as we did great by the time The carriers tried to make it unneutral by the time they tried to buy Priority access on the internet it was too late because it's distributed broadly enough that the endpoints resist centralization Who are the endpoints? We are right. We resist centralization And we resist centralization whether we know it or not because we see the value of neutrality as expressed through the ability To blog as loudly as CBS to share our opinion and create grassroots revolutions on Facebook Right those principles of neutrality translate into power and we're not about to let go of that power Even if we don't know how it relates to neutrality Bitcoin is neutral today It will be neutral for as long as we fight to keep Bitcoin neutral as long as we resist attempts to centralization and Cooption if you see people trying to make sure that transactions on Bitcoin can be prioritized in a way not Per the size of the transaction But based on who the sender is or who the recipient is scream because that violates the principle of neutrality and that principle of neutrality is the most important and valuable characteristic of Bitcoin so To wrap up Neutrality will lead to adoption. It's one of the four preconditions to adoption. We need to address the other three We need to make sure that we can easily demonstrate the value of Bitcoin over national currencies where that value is clearly Identifiable we need to make sure that Bitcoin can be accepted because it is able to work in an environment without electricity without communications, etc We need to make sure that people can use Bitcoin without getting jailed or shot One of the great reason ways to do that support Bitcoin charities Beyond enterprise really really Cherish the gift economy we've created with Bitcoin and support Bitcoin charities When a legislator runs out against the campaign that says if you kill Bitcoin these kids starve This puppy goes to a kill shelter and this bear in China doesn't have a future and goes extinct That's a much better message than Bob the speculator won't make enough money invest in charities because that Enhances the concept of neutrality and makes it concrete finally When these changes happen and when you see this massive adoption You're going to see again attempts to violate the neutrality and we need to resist those Ask yourself if a change is happening. Does it give me enough utility to be worth giving up this principle of neutrality? If you enjoyed this video, please subscribe like and share All my work is shared for free. So if you want to support it join me on patreon