 Welcome to the May 2022 episode of law.mit.edu's idea flow where this month we're going to go deep into governance, the sort of how to do it and how not to do it in a decentralized world with our very own Wasim Alcindy, who is the technology editor for the MIT computational law report. The premier publication of law.mit.edu. And this is not just a topic that's near and dear to our hearts and mine in particular I've come out of legal governance for especially multi party systems. But it's also very much a sort of brick that we're building in a new structure for the publication on the very notion of composable governance. That's being spearheaded by our editor in chief Brian Wilson who thank goodness is with us and is going to be helping to host this conversation and also mute people as needed and things like that. And so, without further ado, I would like to introduce, I would like to invite you with seem to come off mute and to introduce yourself and then if you will to give us a little bit of an overview of what you're going to say so people kind of are in tune with the topic. And as we discussed earlier, we're going to structure this this program as more of a conversation. And so, and just the final thing I'll save in prep is what I hope will come out of it in addition to learning and sharing information is is to start to highlight what some of the misadventures to use your language have been in governance in this in this new decentralized space, and and especially what we might learn from this that can perhaps even serve as an input of some kind or a design requirement of something to get right a type of a capability or a process or a method or a mechanism for governance. So, so with all that said and done with seem the floor is yours. Yeah, thanks very much as a everybody. Yeah, it was always good to be here. This time, I'm in control. So, yeah, it's it was all bit last minute, putting this together. So it's, I don't really have like a case of a presentation for you so I've just thrown together some slides and like I wrote a little provocation which I think we shared in advance. I just didn't share my screen and we can have a look at some of that this one. Hopefully, you can see that great. So, yeah, so the, the, the topic for today. Let me just find that over there. Yes, I've got you over there. Great. Yeah, so topic for today. And we're talking about, you know, so that we're here on the auspices on the ages of the MIT computational law report. And I suppose that I'm the technology editor, normally here, and I know very little about the law, almost nothing. But I suppose some familiarity with the governance of technical systems, especially headless peer to peer decentralized ones. And gives us an indication of where the computational law might be going in the future. And so today I've just taken a particular slice through this like rich complex messy topic of, you know, crypto governance, especially to do with like blockchain cryptocurrencies. And we're going to talk about where it all began, which is Bitcoin. And so, yeah, it's not a very structured thing. But what I did was I put together a couple of slides. Oh, let me, yeah, here are the, here are the provocations or the questions that want us to ponder consider through this. I'm hoping that, you know, does a Brian and everyone else here can can help us do that. Together. So here's some questions for us to ask ourselves as we go through the journey. And so the first one is, you know, well, first of all, I'll say that the, the subtitle here is the price of Bitcoin's anarchy. And I think like actually anarchy is quite good way of thinking about Bitcoin, that kind of no gods, no rulers. There are some rules, though, networking poses and protocol poses rules. But like in terms of, you know, prescribing or prescribing how one entity should behave with regards to another, there is pretty much nothing else. And, you know, in some ways that's, you know, a lot of people that like Bitcoin use it see that as a boom. And I think a lot of other people see that as headache or, you know, worse. So here's some things first upon them. Yeah. How does today's reality, where we are with Bitcoin in 2022 line up with the enduring narrative imaginary of Bitcoin as a tool for empowerment, inclusion and fairness. How did decisions get made in a headless community without any formal governance structures. There are clear tensions between the drive towards protocol ossification, the idea that we can kind of reach a final specification of Bitcoin that doesn't change and forward progress ideals to keep improving the technology, which one wins out. Can Bitcoin still be thought of as an experiment when nation states are formally adopting and integrating it into their societies. Can such a legal monetary asset endure under a hostile regulatory environment. And, you know, I guess the ultimate question with all of this, especially as we look back to, you know, the law. The law part of computational law to what extent can the law meaningfully impact Bitcoin. And so like I've got some materials which address some of these things in tangentially or directly. And for other ones like I'm hoping we can just have a bit more of an open discussion. So I'm just going to kind of go through some like, yeah, some bits and pieces. And hopefully we can. Yeah, explore some of these things. But before I do that, I should just say a little bit about myself. So like, you know, just say about how I got here. So I was originally a scientist. So I've got several degrees in physics and chemistry. And you can see a bunch of stuff might be actually on the left column there, doing photo ultra fast photo physics of super molecular assemblies. So that in that what that translates to is using lasers to do very fast photography in the different parts of the light spectrum. And so, yeah, that sounds very far away from the law. And it is. And parallel to that, I was also had a kind of creative practice art music kind of stuff. And that took off in my late twenties after I finished my PhD. So I went off and traveled the world did music and art stuff for quite a while. And while I was doing that, while actually while I was in the Bay Area on tour in 2013, I went to visit a friend who was doing an internship at Intel. And he opened his closet and said, check this out. I'm doing this thing called mining Bitcoin. And so that was my entry into this into this world. And I just, you know, I was very curious at that point. He was pretty negative about it. I'll be honest. He was very down on Bitcoin because it was costing a lot of electricity to do this mining back then. Bitcoin wasn't worth very much. It's just a science project. Really. So yeah, my first introduction to it was actually quite negative one. But because of my background, like so my family is from Iraq from the Middle East and they had a lot of political economic problems there. And so the idea of a natively digital censorship resistant, tamper evident, you know, coercion resistant mean natively digital means of value transfer that immediately spoke to me. And so yeah, I just went down this rabbit hole over the years. And that took me through to being an independent researcher, writing papers, science philosophy and so on. And then, and then I showed up in a place called Boston, Massachusetts in 2019, where I got a job to set up and co-found the MIT Media Labs Blockchain Journal, which is called Crypt Economic Systems. And so we also did a conference series. So prior to the pandemic, we did a couple of conferences. And we were really built trying to build this big tent by trying to bring people from all of the fields together. So from cryptography, from art, from law, economics, philosophy, everywhere economics, computer science and theory, of course. And so we were trying to build the field by bring, you know, doing this kind of big tent work. And I think that might be one of the reasons why I'm here, because while we were doing this journal, I got to spend a lot of time with people like legal academics and legal minds, policy people. And I didn't expect it, but there were the ones that I got on with best, like I thought I'd maybe get a bit more with the kind of STEM science and computer science, science types giving my background. But I got really well with the more law types. And just before I went to MIT, I was also working on a regulatory epistemology project called Token Space, which I'm not going to talk about today. But I was trying to build representations that could help disentangle the similarities and differences of the characteristics of tokens and assets and networks. Anyway, this is the thing that I do now. So I'm in Berlin, and we have this kind of a collective which is kind of engaged in art, philosophy, theory, and other forms of interrogating digital culture. We write, you know, we write, we do research, we produce art, and so on. We're currently funded by the European Union and Ars Electronica under their Start Fellowship Program, and we're currently writing play theatrical production and computer game about Bitcoin and its impact on the climate, which is something that we're going to touch on in a moment. And so we use this notion of the price of anarchy at the top, like, you know, the subtitle of the blurb of the talk. I just wanted to elaborate a bit on that, because I think it's also a very interesting concept to think about more generally. And it's something we've discussed in the salon here in Berlin quite recently. So this idea of the price of anarchy comes from economics and game theory, where you're essentially trying to kind of squash down and formalize in a mathematical closed form sense, ways that you can compare the performance, the efficiency of different organizational topologies. So you could think of this as packets of data going around networks, but you can also invoke these same kinds of contexts for human organizing, mutual aid, solidarity organizations on the left, and so on. So basically what you're trying to do here is understand the tension between horizontality and verticality. Horizontality, I mean, this kind of peer-to-peer-ness, this decentralization-ness that you see this kind of drive, at least kind of an ideological drive towards in a crypto space, versus this kind of top-down command control cybernetic or, you know, command control or cybernetic type structures, which we know are efficient because we've been using those forever. But then we lose something there in terms of agency as individuals underneath those bureaucracies. So yeah, so the price of anarchy is an interesting conceptual lens to think about the differences in efficiencies and the tensions between these competing goals or ideals. So yeah, that was our set of provocations, which we just came to. I thought we could run through them a little bit one by one. And, you know, when we come back to this kind of master slide, you know, Dazza and Brian also feel free to jump in, like if you might have questions or provocations, which we can elaborate on a bit more. I've also got stuff in the trunk if we go quiet. I mean, I see Brian came off mute, so I encourage you to pipe up and just consider this like a living room conversation of the type that we sometimes all have together. But I do want to just throw one thing out that's almost a framing question, just to be at least, just to get it out onto the table, which is it's, and it came out a little bit with your previous slide looking at, I guess command and control approaches versus self organizing emergent who knows what you'd call what the theory of change would be for for totally decentralized systems. And it is, and it's just that which is it is there a decent truly decentralized system that even exists for about which to just governance you know should be talked about or could be talked about in any practical non completely theoretical way, or is it, or is it really that we've got systems that have, you know, aspects or maybe aspirations toward decentralization, but in reality are implemented and deployed in ways that have, you know, clusters of command and control, or, you know, takeover even in ways that are maybe just below the surface or, or even reflected within the architecture itself. And, and then, I guess part of that is just to be just to confirm ordinarily. Those of you who have like to hung out in law.mit.edu, especially it's like prior incarnations before the computational law report know that we have had a pronounced preference toward like the boring side of the spectrum and like looking at exciting things, but in otherwise completely mundane and you know centuries old in some cases, organizational forms. And, and this is different. And so like very much in scope. Finally, for everybody that's always wanted this. Now is the day on this topic of composable governance where it's okay to talk about completely decentralized systems and new forms of business and social relationships and things that are, you know, arguably don't exist today but I guess I want to throw out there like number one is there such a thing and number two is the scope of this talk should we say that what our benchmark is is we're looking at what would a truly decentralized system look like and how do these governance approaches, you know, you know, succeed or fail against that and if so like why I guess I just also throw out there like why are we talking about a completely decentralized system like did somebody wake up someday to say that's the goal and if so like what were the reasons for that. Yeah, I think decentralization is really helpful to think of whatever you think decentralization is or means like the way helpful that way to think about it is as a kind of a poetic ideal or a goal. Like it's a thing that we feel like it's virtuous and we're driving towards. And when you think of it like that explains a lot of the behavior in the, in the crypto space because you always hear people say, Oh, we started off centralized but we're going to be decentralized decentralization is the goal sufficiently decentralized as a human set in 2018. So the decentralized equals good. Right. I think we've, you know, that that seems to be at least the implication in this course. I think what we're really trying to get out in this talk, especially because we're talking about extremely inefficient system like the name of Bitcoin is the and we're using this frame of the price of anarchy to say that, you know, this is ideologically speaking decentralization is this kind of goal where people think it's good, but it comes out. There are prices to pay for it. One of the prices is in this kind of notion of efficiency. And if we talk about digital networks with obviously just passing messages between nodes like whatever they're doing that essentially boils down to that. Then you can measure these things you can kind of characterize and measure these things in quite, you know, or at least, you know, talk about them quite a formal sense. So decentralization is messy decentralization is inefficient. And, you know, it takes a lot more messages or it takes a lot more communication time to reach consensus on things when there is no authority. I think we all know that because like there's always situations in even in the hierarchical world that we like, you know, the institutions that we inhabit. Parts of those which are a bit anarchic like I don't know the coffee room is sometimes a place of like anarchy right where the rules don't seem to work in the same way be enforced in the same way. And so like, you know, in those kinds of situations where that tends to be lack of authority we start to see, you know, entropy or chaos start to build up. So like, it's not it's natural for us to I think then see, you know, and realizations that doing certain parts of processes, organizational processes in a top down way, or in a regimented way would lead to more efficiency and like Salon conversation on this topic earlier this week. Somebody mentioned. It was a I think it was socialist worker cooperative, and they were organizing in an anarchic way as possible, except for their voting decision making for the actual kind of like whatever the gears of governance where they had this very fast cadence of votes, because they know that they knew that that would otherwise be that kind of decision paralysis from being from that kind of radical inclusiveness that flat structure necessitates. So I think and somebody also said in the conversation last week, I can't review it was that there's no decentralization without centralization that you know these two things are kind of not exist they exist with each other. I mean in young, in a way. And so you kind of can't really have one without the other. And so I think, you know, we see, like, why people like to talk about centralization as a good thing. But then like it's just the kind of the baggage and the costs that come with that, and they can be born in many different. Yeah, many different ways. And so, looking at the question that Chris posed, I think a good example of how this inefficiency plays out from the, you know, more decentralized context. So if you look at what Ethereum is trying to do with implementing Ethereum 2.0, you know, that's taken forever. Like if they were just an authoritarian kind of, you know, top down we're going to make it this way, you know, it could have been, I think a lot faster than the two or two years into to get it going. You know who knows how long it'll take but you know going like trying to answer the question about inclusivity and fairness in Bitcoin. If you think about like what just the the shortest answer I think the price of anarchy is chaos. I think that is best represented by the fact that if Bitcoin works, like if Bitcoin becomes this thing that's so widely used that, you know, all these countries are using it everybody's using it. Everybody's mining it everybody's devoting their resources to confirm the validity of the transactions. That's something that you pointed out in one of the previous salons was seem it like we wind up in a place with thermo thermodynamic entropy that's at such a high level that you know it's unsustainable for life on earth. That's kind of what I'm always coming back to now is like looking at the incentive trade off of like okay. What is the positive of going fully decentralized is it worth the cost of like saying okay we get all of these network effects we get you know the certainty the transactional certainty in some cases, but is what we're giving up in the form of you know the sort of institutional knowledge the indigenous knowledge of what's been built up in these analog states over time. Is it worth losing that. And I think that's sort of the trade off question. You've framed it in a really nice way and this is also the way I tried to frame it as well because obviously topic like Bitcoin is really divisive and so people with the conversation can get really polarized if you're not careful. So I actually try really hard not to make any moral arguments and try never to say orange coin good orange coin bad because reason X Y Z. Instead I tried to frame it in terms of cost and benefits which I think is exactly what you're doing Brian. And like so we know about the benefits. You know, we've talked about at least some of those. I don't think we I mean maybe I assume that you do know which is partly why I asked you to say this. I mean, the ones that I the ones that I actually can show you some slides when I show this slide because just to just to put it into context. When I asked what is the purpose of decentralization what are we going for you sort of said it's thought to be virtuous which is a good start but can we unpack that. That's the narrative side. Yeah, that's that's the kind of like the theory side but I guess like you know then we let's let's do some practice and I think there was also some a question for a little bit of practice in the chat. It's not exactly what was asked for in the chat but it's something. So this is a pre MIT project I was working on between 2017 and 19, like all reaching everyone. And I guess these days you might think of it as a decolonial Bitcoin practice project. So I was interested in trying to find ways to help people that are like under dire economic and political circumstances. And so I think things like Bitcoin shine most when the infrastructures that we rely on our kind of existing financial and governmental social infrastructures when they're steady when those institutions are steady Bitcoin is maybe not needed that much. But when they're faltering, then that that might be a place where Bitcoin can shine. I've seen people talk about Bitcoin as a money of last resort, or as an asset of last resort. And this is kind of what I was getting at in this project. I thought I'd labored the point too much. I wrote some articles for in the mesh as well on these topics. So we did this kind of like design thinking journey of a migrant like leaving the mountains and you know wherever they live, going over, you know, see in a dingy, you know, and then being trafficked somewhere taken somewhere. And in the various stages of that journey, their lives are in other people's hands. And so you could have everything taken away from you in those circumstances, including your life. And so we're trying to think about ways that we could slightly alter the trust model of Bitcoin, which is basically trust nobody to make it this a bit more usable. And we're trying to think of ways that we could connect the what might happen is you have a family in one place and one of the members of the family will leave in search of a better life for whatever reason. And so a way to keep those people connected and kind of like a trust bubble. And so yeah, we can put this kind of dual token system with a kind of like a passphrase. And so this thing could be with a modified brain wallet. So you could then reconstruct this password using the name of the river in your village name of the mountain above your town, and so on your dog's name. And so you could use this kind of like, you know, like regional specific knowledge or situated knowledge. And, and yeah, so this is like we were trying to really do this. But then the problem was the transactions got really expensive on Bitcoin and got so went from like 10 cents 50 cents a dollar $2 to $30 $40 $50. And then that is pricing out that it's like blockchain gentrification in a way that's pricing out less funds or use cases and you know the valley in the mountains of Afghanistan. And now the transactions are very cheap again, or they got a lot cheaper again, but it's more the problem is more actually the variability here, like because you're just kind of like selectively pricing people out as the wave, like the wave behind me. Loops up and down. And so, yeah, so I saw I saw a lot of benefits here that we could use Bitcoin as this kind of, you know, really defensive financial tool to help people that are really desperate situations. But because of the, you know, the evolution of the space. First, it was this kind of uncertainty around the block size. And now we see just kind of like rampant financialization all over the crypto space. I don't quite see the same mass patronage, you know, liberate. But just to make sure I've got this. So the two benefits, if you will, or what will it cost, like in a trade off when you're doing is it worth the cost, you have to be able to articulate what you're going for and then put some kind of value and then do the equation if it was worth it. And two things I've heard you say so far are number one, it can help prevent a kind of a a seizing of assets by a central regime, you know, like in wartime or when the regime goes bad, some sort of expropriation that's centralized. And then number two, when you're vulnerable in a refugee or something like that, or just in any circumstances it can provide a capability for individuals to prove ownership of an asset in a way that doesn't depend on like a house of cards that can come apart in extreme circumstances like warfare and natural disaster or or corrupt government. I think you've got the two. Yeah, towards the end, I think you hit on the two strongest ones. So the third bullet point on this list of narrative evolutions of Bitcoin is extreme ownership. And that's kind of getting at this, this point that you're speaking of. And so yeah, the thing that you own that can't be taken away from you so it's kind of like, you know, this is like a new horizon of property rights here possession is 10 tenths of the of the code is law. And so, yeah, I think you I think you're hitting a point there, but that's the benefits right so on the cost side. There's like, you know, that my, you know, personal journey has been like watching the costs pile up and the benefits not as cruise as quickly. And ultimately, those are subjective value judgments that one has to make. And I see the kind of ecological end game for Bitcoin has the biggest, you know, the final battle final boss in this particular scenario. Thank you. And I'm sorry I interrupted you Brian just to make sure I understood what the benefits were. Yeah, no I think an example that I've been thinking about a lot lately with this. I think question that people try and oversimplify a lot which is like is it, is it good or is it bad I think it's really context dependent. And as an example of that it's like, you know you think about Bitcoin with the conflict like with various conflicts like in the conflict between Ukraine and Russia. You know, Bitcoin can be seen as good because it does, you know, it gets people the ability to transact but Bitcoin can also be a bad because it gets, you know, bad actors away to legitimize or receive, you know, financial compensation Elizabeth Ranares had a really good article on how Bitcoin might actually threaten human rights and has been in conversations on Twitter a lot with people who, you know, think that it's this really great thing all the time and I think she makes some really good points that a lot of the space doesn't really know about or doesn't really consider and so I think that expansion of the dialogue to be much more broad than the kind of like oh yes it is good or oh no it's you know bad I think that is important grounding context there. The one of the realities is you can't stop people from using it. Yeah, you can't choose who uses it. So I remember I wrote an article about stable coins in 2019, which I've been dredging up again recently in light of recent market events. And in there I've the lead the main image was screenshot from a newspaper which said ISIS treasury decimated as Bitcoin collapses. So like ISIS was keeping its money in Bitcoin because they can't get a bank account either, right. And so like you don't get to choose who uses it. So you know it's Elon Musk and it's ISIS like you don't get to choose. And that's again another problem and I think Elizabeth is also, you know, hinting at these tensions in the article. Yeah, the currency of enemies. Yeah, yeah, indeed. Yeah, I think it's but then the thing is that that also then speaks to this like a very conservative kind of libertarian cultural imaginary that goes around, especially Bitcoin. But I think it really cast a shadow of the whole space still really quite a lot. And so that's, you know, that's also something to bear in mind. I had a slide that I wanted to jump to just try to remember where it is. Yes, I think the ultimate point is that Bitcoin doesn't care. It does not care cannot care. It doesn't have any like minimal sensing capabilities. Even something like Ethereum with this kind of like, you know, Turing compete ability for obituary computation has this like sense a ability a little bit more than Bitcoin but Bitcoin really can't doesn't care about what happens outside it just wants your energy. That's really, that's really it. So I think it fits with the kind of right wing ideologies and like people at Columbia has been writing about this for almost 10 years by now. So this kind of like link this kind of techno libertarian streak to right wing thinking and Austrian economics, but pretty clearly expounded. And it's worth remembering that half of all the bitcoins that were ever will ever be created were dished out between 2009 2013, like 10 and a half million of the 21 million coins went out then. And like it went to early doctors who were mostly leading right mostly. Yeah, I think that, you know, that too gets to another weird kind of point, which is around like that variability of the price fluctuations in Bitcoin. And I, I just found out about this I might be late to the game here but do you know about the Bitcoin rainbow chart. Oh, is this way I think I know I think I know you mean just a price prediction thing. It sort of tracks everything on this log scale, based on, you know, the, the time between the havings. And it's really, it's really interesting. Certainly not what I would consider to be like investment advice but it's, it's definitely an interesting context for understanding how these price fluctuations sort of spike and one key thing to know one thing you think to know because you'll sort of see like on the rainbow chart that Brian's linked is that the cycle seems to go every four or so years. Yeah, and that coincides with very key parameter in the Bitcoin network, which is called the subsidy halving so every every coin every block in every page in the ledger of the Bitcoin blockchain. There's a set of coins in there as the reward to the miner for doing all the work, or the you know group of miners that did that. And that reward halves a deterministic schedule every four years called the halving. And that thing is kind of the ratchet effects of the ratchet Bitcoin scarcity effect. And so I think it's not a, it's not an accident that you see this kind of four year cadence on this, on this chart as the scarcity ratchets up. And I was talking with somebody who is explaining that a big driver for this is the, and this ties back into the thermodynamic entropy and chaos of, which is the price of anarchy, which is that the cost benefit analysis of, is it efficient to mine Bitcoin based on the electricity costs in my area, that kind of continues to go up and down based on, you know, what the availability of what the available number of blocks to mine between now and the next halving is. And so it kind of ties into what I think the slide is going to talk about with thermo economics. Yeah, I mean, like so proof of work, Bitcoin mining is the engine, it's the engine of Bitcoin and Ethereum. So it's really the kind of the beating heart of these cryptocurrencies. And like, you know, I don't know, spent too long elaborating on how the mining works. But essentially, it's like a lottery, where each time somebody does one of these cycles of computation with these hashes, it's like a lottery ticket. And if you find a winning lottery ticket, then it turns into a game of bingo, as you're telling all the different nodes in the network, hey, I found a block. This is this is valid. And then if the network agrees that your block is valid and then adds it to the, you know, we reach consensus, we add the block and we start again. And so the bribe the subsidy that we mentioned earlier is the reason the motivation the incentive for the miners to do all of this stuff. And they also get transaction fees as well. You know, a bribe that the users send to the miner to include their transactions as a priority in the next block. And so, yeah, this is actually kind of like a very, I suppose, conceptually simple system when you think about it, like it's a lottery, and then it's a race. But it has all of these kind of unintended consequences. And that's what Brian was starting to allude to. I'm sure like there's nobody on the call that hasn't heard about or read about an article about the energy consumption of proof of work cryptocurrencies by now seems to be a very hot topic. And that's what I will say is that the key for me is like, though we didn't mention it, I should mention it, there's this thing, the one piece of feedback, the one piece of feedback that Bitcoin is capable of is called the difficulty adjustment algorithm. The difficulty is related to the probability of each one of these cycles of mining finding a block, just like the probability of the lottery ticket being a winning one. And that is adjusted up and down every two weeks, every 1440 blocks, depending on if the hash rate, the amount of total amount of computational power going into finding blocks on the network has scaled up or down. So this thing is just constantly readjusting the probabilities of the lottery tickets being winners so that the blocks come at a steady pace and the clock keeps ticking. But the consequence of that, and this is kind of like the crux of the book I'm writing about proof of work, is that Bitcoin will then know no satiety. Like there will never be enough energy to save Bitcoin, it would always want more energy and it would just keep on recalibrating and adjusting. And it's for that reason that I call Bitcoin inhuman monetary system. I mean, the monetary part is actually arguable, I think, we can debate whether we think it's a good money or not. I personally don't think it's a great one right now. But because of this lack of ability of the network to sense outside of its environs, it can't differentiate the kinds of energy you give it, it just wants energy, which means the people that are incentivized to do the mining to supply Bitcoin with energy, they just look for the cheapest energy wherever they can find it. And that involves them traveling all over the world, doing all kinds of crazy things. And in the moment that we're in this kind of ecological moment, and we can all see it, we can all see these IPCC reports these days. We see the record temperature and Antarctica. There is a, yeah, there is a kind of a, I don't want to use the word tipping point without, you know, putting air quotes around it. Because not a lot of people like it, but Bitcoin could be like a marginal factor in the crisis that we have on our planet. And that's kind of the crux of my argument and his meme to illustrate that, which is like, you know, we're all being promised financial growth, perpetual financial growth, exponential financial growth. But the, you know, these systems are connected to the material realities of the world through proof of work. And the world is finite, matter is finite, books finite and all the rest of it. And so here's really, like, I love showing this to people. This is the hash rate, it's not the price, it's the hash rate. So this is the indirect measurement of the computational resource going into the network. You can see at the start of the chart on the left, there's nothing. That's not even the start of Bitcoin. That's halfway through Bitcoin's life. That's 2015. So there's even, you know, it was way lower than that before. So you can see this thing is like, you know, now, and now actually this is, this is old. It's gone, it's gone way, it's back to all time highs now. So it's actually above here now. And so, yeah, and these pictures, you might have seen pictures like this of mining farms getting flooded, burning down. And the reasons for this is the miners do crazy things to go to these energy sources. It's kind of like ultimate, you know, value energy sources. They might go to places with hydropower in flood seasons and then their facilities get rained out. Or they might go to deserts and plug into like, there's, you know, I saw stories of people plugging in Bitcoin miners directly to oil wells, you know, like, well, oil well combustion engine Bitcoin mine. I mean, literally directly. You now have, I think I have a slide somewhere, the thermo economic slide I showed earlier. Let me just go back to that for a moment. That is Bitcoin A6 inside shipping containers with diesel combustion with combustion engines, burning natural gas from stranded fracking wells in the Permian Basin in US and Canada. And so that is methane that would normally go in the atmosphere or get burnt to CO2 and not used. So in a perverse sense, that might actually be helping. This might be net positive in a crazy way. But the problem is then this allows for corporate greenwashing. So that Exxon is doing this and they're like, this is carbon positive. We're saving the planet. And I'm like, no, this is means you can do more fracking. That's not good. Yeah. Yeah. If you go two sides forward about the, you know, at the cost of, yeah, back one. You know, the, I think an interesting analogy, or an interesting kind of isomorphic example is, you know, the only thing that has exponential growth and, or one of the only things that has exponential growth in nature is cancer and it kills off the host. And so if you think about Bitcoin as this, you know, this driver of exponential growth. It's a scary, it's a scary parallel. And I hope it's not the cancer of the earth. Brian, do you know the game universal paper clips? Have you come across that? Oh, I have to post a link for you. Before I do that, I apologize for wrecking your productivity for a few days. So I'm going to just post this thing. And I like that's with the disclaimer, it's going in the zoom chat and the Vitalik, the founder of Ethereum, co-founder of Ethereum posted this. And so this is kind of the tech example of that, of the kind of, you know, all consuming cancer. But this is like a paperclip optimizer. So you start so very instantly, you're just kind of clicking a button, making paperclips, then you get tools to make paperclips. And then all of a sudden you're a hyper dimensional intelligent AI, harvesting all the matter in the universe to make paperclips. And so that's the logical endpoint of that. And that's kind of like Bitcoin. And just a total aside on the art project we're working on, which is a theater production about Bitcoin boiling the oceans. We've taken, you know, Clippy, the Microsoft Office paperclip, that little annoying anthropomorphised avatar. So we've made an analog of Clippy out of Bitcoin ASIC, Bitcoin mining machine. It's called hashing. It's the avatar, the greenwashing apologist of the Bitcoin miners. Do you want to see a picture of that? Yeah, I think that sounds like a very interesting. And then after that, could you round us, there's so much to talk about with governance. I think, you know, extermination of the planet is a real good start for a challenge. But could you also sort of rounded out to some of the more traditional governance issues like that are, you know, posed by some of the examples like the Dow hub disaster, resulting in a fork, a hard fork of Ethereum, which arguably was at least a part of governance issue there in terms of how decision making occurred to make sure security and decision making for how to, who decided how to address the problem and to fork, and all of that would be back to the oligarchy there. Or you mentioned something about the control nodes and the takeover with the Dash system. There's so much as I mean, like how many, how many days have we got to talk about this? Yeah, so like, I don't know where to start. These are all topics that I'll be covering in my Misadventures in Crypto Governance column at the MIT Computational Law Report. So I'll just try to give you like really whistle stop tour of those, I guess between now and the end. This is hashy on the screen, by the way, the apologist for thermocapital. So yeah, this is us kind of like taking a ride, like stab at possible future of Bitcoin, where the miners are just trying to like kind of sigh up the planet into letting us keep them running. So yeah, let's, I'm going to come off the screen share and we're just going to riff I guess on the rest of the stuff for the rest of the time. I think that's good. For those of you who haven't seen it at law.mit.edu we've got regular columns now among the by the editors so that we're producing some of the content as well as publishing your content. And one of those is with scenes columns which is Misadventures in Governance and we linked to the first one in the episode page which we should certainly read but there's going to be a lot more to come and yeah if you could give us a little preview of that that would be amazing. Sure, I mean like so it's like a potted history of like, you know, I guess how to and how not to do things, but it's mostly how not to at the moment, I'll be honest. But yeah, so okay so Bitcoin was the first chapter which we talked about a little bit today, and there isn't really any governments and that's why it kind of happens in kind of smoke filled committees like it happens in GitHub, it's about the control of upgrade rights to GitHub repositories pretty much. So there's this improvement process, all of these conversations happening like a Linux mailing list on Twitter places like that. And then like, you know, if you have enough of the Bitcoin personalities behind your thing you might get it through. That's kind of how it works. It's kind of like a very informal reputation system which is very liable to, you know, it's not great. It's not formalized and it's not great. And it's going to be very hard to change that because Bitcoin doesn't really have any way of very hard to put anything inside it. And the blockchains don't pivot they fork. Right. So when there's a multiple so you have this new kind of mechanism of succession of schism with with blockchains, which makes it very easy for a group of people that decide they want to do something different, they just change the rules of what they think is acceptable to a block to a transaction, whatever, and they're off. They're running their own network. And so there was in the years of Yeah, 1716 1718 there were a few kind of interesting things that happened in the in the world of crypto that yeah used this kind of like fork based such scorched earth governance is really extreme way of doing doing things. And so in 2016, not long after Ethereum launched, there was this project called the Dow, which I guess probably most people in the law world probably heard about by now was meant to be a kind of centralized investment fund, a huge amount of the theorem that existed that time went into it. And there were some warnings about like sloppily written contracts because obviously like back then we all thought code was law. We actually thought we could really do code is law. And so that this Dow was made in mind with code as law, like they genuinely believe that at the time. And people pointed out, actually this problems with the code before you deploy this please check the code. I mean, good sire and colleagues wrote something hacking distributed which is still online. And so the thing went live, and then somebody found a way to drain the funds from it. And so then there was this big conversation in the Ethereum space about like what do we do. The person could the hacker couldn't access the funds for 30 days, which kind of like time locked. So there was this period of time to decide what would happen. And there was this some carbon vote, which is kind of. Yeah, like a token holders vote, like if you have 10 tokens you have 10 votes if you have 1000 tokens you have 1000 votes. They did a carbon vote very quickly. And the result was like let's do a fork, take away the hacked funds from the bad people and and like, you know, delete that and then like I can never happened kind of thing. Now some people didn't like that, because they thought code was law they really thought it not like when something bad happened. No law is law code is not law. Other people like no we actually think code is law and they carried on on the original path of Ethereum, where the bad person kept all the money. And like they put the rules were respected. And that's Ethereum classic so that still exists to this day. And I got very interested in the, like the diverging histories of these two, or the diverging futures of these two networks. And so I started writing papers I have this paper series called for economy from the 2018 and 19. And the people from Ethereum classic Reddit and then I went to speak in South Korea their conference. And I kind of predicted all the things that were going to go wrong with their network and then they happened. Like they got 51% attacked. They got gas token arbitrage. They got mining pool centralized. Yeah. So they're all these kind of like sad things of being like a little the kid, the kid sibling of the big, the big dog. You kind of get a bit crushed in the, in the, you know, in the wake of that, in terms of, if there's a lot of mining power out there, and your network is very small compared to the big one, it takes only a small player to come over and completely mess your stuff up over here. And so we saw that quite a lot. At one point. I know this because I was depositing tokens myself exchanges wanted so many confirmations they wanted you to like send your transaction wait for so long to be sure that the network wasn't going to get attacked. And it took weeks for you to deposit something on exchange of Ethereum classic for it to be confirmed for them to think it's safe enough to not be reorganized. So think to yourself like you know, you've got $20 in your pocket. Like that money would not be as good if there was a 15% chance next time you put your hands in there that wasn't there anymore. Like, you know, this, you know, how can you build a solid reliable anything if history is going to get rewritten from underneath you. And so yeah, that was a bit on the ETH ETC side. And indeed, it's good that you're posting stuff like the Dow attacker because people think they know who it is now. They didn't know for years, but there's now some. Oh, no, there's yeah, I thought that's what you're posting somebody ID to potential attacker. Yeah, I'm not sure. I'm going to, I'm going to do some background searching. So that was the Ethereum situation. It doesn't go without saying if I may that one of the issues here good cuts directly to the supposed benefits that we identified which is extreme what do you get extreme ownership nobody can get between you and your stuff. Oh, and the only way to implement this that we know of is with exchanges where people can freeze your funds for 30 days where people can make you wait 15 days where people could theoretically expropriate your funds if you're on a sanctions list or on and on and on for arbitrary and capricious reasons. So let's just keep track of the benefits and how they map to the implementation as well. Yeah, I think like there's kind of two games here that's like kind of the game of like playing with the tokens on the exchanges like speculating on somebody else's website and you may as well be holding stocks at that point on a brokerage like you know you're not holding the coins. And there's like, you know, you run a node or a wallet and you've got the coins you self custody them. And that's the kind of the extreme ownership, but I think like when you've got your coins on a custody service. And they're just entries on a database in their wallet really so that you don't really pay them down those. Yep, so one of the things I hope we take away from this by the way is, especially in the composable governance work, Brian and everybody is the big distinction and implementation between non custodial versus custodial wallets and what it means for an individual to create a key pair and to utilize that pair that they have exclusive control the private key of that pair that they have exclusive control over to exercise their rights and to have control over the property as well. But also say something right for example. Yeah, let's also say something about social recovery because I think this is an interesting new model that's being tried out in in the Bitcoin in the web three space and now a bit more in the Bitcoin space. The idea that you say normally you have like your whatever your public key or private key or username your password, they might be crunched down to a seed phrase like some human readable words. You can use as a pseudo password, but social recovery is really interesting because say you lose access yourself but you can nominate some people that you do trust. They can help you they can each have a fragment of your key and help you recover your thing. I think that's a nice model for the crypto world because honestly even people like you know I'm an expert in this space for 10 years. I'm still terrified every time I use these stuff and make a transaction. I gave some coins to my younger brother who's got two degrees from Cambridge thinks he's smarter than me. He lost him. He lost him immediately. So like it happens to everyone like you know, I'm pretty sure at this point, more value has been lost. More value has been burned by people losing access to their wallets done ever like hacks and attacks and robberies way more. Yeah, and I think it's, you know, one example that is kind of interesting that has sparked some debate from like the last week or so was Seth Green, the actor had like lost his Ford ape that he had built up this entire TV show around. And there are lots of weird IP questions of can they continue the show because you know he doesn't have possession and therefore doesn't have the IP rights associated with it anymore. As I understand Brian, I spoke about this in an art history lecture I gave yesterday, believe it or not. Oh, nice. And he's currently negotiating with the person that bought his ape from the scanner. Yeah. So it's now it's now been like it's stolen goods have been handled and now some innocent person has got them. And so then like, you know, this idea of possession and rights and ownership and access that it seems to be this massively gray area around all of this stuff and not least NFTs is really coming to the to the for again and there's another great example which was spiced out if you remember the June comic book, the hundred extra reserve price by this now they thought that they could make a movie because they bought that book. People were like, this is a book. This is not rights to anything. And so yeah, there's this massively gray area of all this stuff and you all everyone else on the school knows way more about that than I do. I'm just seeing these kind of tensions come up from the crypto space. People really, you know, come come out of this space very naively thinking that they have a series of rights and affordances that they they don't or they just disappear and smoke like happen to this actor. He's making a TV show he's making TV series with his eight. There's there's a there's an interesting I posted it's the most recent link in the chat but these lawyers for somebody called our web three law firm called the anti firm talked about really the need for new types of intellectual rights within the context of NFTs. I mean, there's been this sort of development where with crypto punks larva labs had like the parent company of the NFT issue or the NFT issue or retained all the rights and then the board Apes got like very popular because they gave all the rights away and attach them to the NFT itself and I think there's going to be a third kind of trend where, you know, the rights go to specific people for specific circumstances with regards to the NFT and it's kind of funny because it feels like everybody's really high on, you know, the decentralization aspect of a lot of this but a lot of the biggest innovations are sort of coming back to, you know, the old models that we've had for a long time. I think, as evidence of that, you know, the most that article that Glenn, Glenn Weil and Vitalik and Pooja all have her. I don't know how to say your last name. Put out a week or two ago about soulbound tokens. You know, it's really like, it's like tokens that you can't spend or like can't like non transferable tokens. It's like, you know, that's really just like a basic identity credential and we've had those for a while like it's not really a new innovation it's just like what happens if I lose access to my soul. Yeah, that's you know, have you made a deal with the devil. But you know, and this really does get back to some of the primitives in terms of law. And so, like, and as you sort of suggested was seen there is a rich heritage in every legal system for dealing with stolen goods and so if you look even at the uniform commercial code, a thief of someone's property cannot transfer rights to the property that they did not have in the first place and so then that raises questions of you would expect if that was a rule that was mirrored in a decentralized system that upon an adjudication of some kind or some determination that this was stolen and the eight the buyer of the eight wasn't the rightful older maybe they can be made right. But the original, you know, owner is it reverts them, which raised the question, who decides whether something was rightful or wrongfully done. We're just on this topic as before we're about to break I just noticed something today happened that we should mention, which is that consensus, the large Ethereum venture studio has partnered with this thing called asset reality to do recovery of assets for people to get scammed through using misusing what it's like metamask. So there are already starting to be some kind of like a non quasi legal methods of recourse, maybe joining up the old legal world to the new one. Right, or to make joining up or learning from the old one and refactoring it for decentralized world, so that we have capabilities but they're maybe met in new ways like if you have a jury that's listening to evidence and making a determination and deciding for example that a board eight belongs to the original owner or not. We could say that that is a type of governance capability it's people listening, deciding debating, making a decision and we move forward. So I think this idea of how to govern, and what are the methods and mechanisms of governance is really critical to this whole thing. There's so much more that we should talk about. I wish that we had gotten to the dash masternode take over and what it looks like with cartels and let's say that for the MIT workshop. Um, so here's some good news everybody on June 29. We're getting the band back together at MIT and the editors for the MIT computational law report are going to be convening to get a bit of a work session done but but we are planning to open some of that up. And to talk about composable governance so stand by if you're if you're in this episode then you're also on the idea flow list, and we will send out information about that, where we can get into it further. Moreover, if you're interested in these topics and anything that's been said today is sparked a question or a comment or a new idea, perhaps in your head, then you should really go to law dot MIT dot edu forward slash composable governance and learn more about the actual issue that's coming up and submit your ideas, which could be in a written form, or they could be in a rich media form, it could be a prototype of technology that you're done. And Brian is leading the charge on that so you can reach out to Brian Wilson who's available at the website and was seen is going to be I hope, taking a big role in the composable governance special release to come later this year. With all that said, I just want to thank you so much was seen for for coming forward and sharing some of your, your perspectives and the background your wisdom with respect to misadventures and governance and, and, and I hope that you will come back to another idea flow as well as these other so that we can just get further in in revealing some of these examples and almost case studies of what's happened so far with governance and what we can learn from it in the design and architecture and the build out and the measurement of systems of governance for decentralized world that maybe would work a little better. Thank you very much for coming. Yeah, thanks. Thanks Brian. Thanks everybody. It's always great to be here. And yeah, I'm always happy to come back and share ideas with you as long as as long as we all have ideas to share and to to flow around. There we go. Okay, so see you next month on idea flow.