🎙️ The Crypto Renaissance | Josh Rosenthal

welcome to bankless where we explore the frontier of internet money and internet finance this is how to get started how to get better and how to front run the opportunity i'm brian sean adams i'm here with david hoffman and we're here to help you become more bankless david what an episode i know it's an awesome podcast because as soon as we finish recording i just want to listen to it again that's what happened with this recording yeah this is to me this is the through line of crypto if you want to figure out

what crypto is you need to go all the way back not just back into the 70s where cryptography was created we are going all the way back to the 1300s the late dark ages because that's where the renaissance happened that's where double entry bookkeeping happened that's where a cultural revolution happened and this uh this the inspiration for this podcast came when i was trying to figure out uh when we were right after the nft mania and there was some sort of loose thread about some connection between ether as a

money blockchain as a system nfts as a technology art as new culture and so i asked on twitter it's like hey uh who who has a professor that is teaching them about like early early european like history when it comes to wealth art and culture and this guy josh uh just raised his hand is like i'm not a student i am the professor uh and he's got a phd in in medieval history and in european history uh and he's also also working in the in the realm of crypto investments and so josh rosen rosenthal

is a fantastic steward of this message that is the same underlying core advances of humanity starting in the renaissance all the way through crypto uh where we are today and the the power of what josh was able to lay down is still ringing in my ears david i don't think i've heard a podcast like this ever in crypto across any any podcast i don't think anyone has looked at it through this technical historical lens and brought these themes out uh and this is really like the first maybe the

first podcast on what what we call in this podcast the crypto renaissance and we talk about like all sorts of strange and interesting things like what was the life like for a peasant in the middle ages how does that relate to our life today how did that change in the renaissance how will our life change from the world we live in today into the crypto renaissance we even talked about demons pooping and like art and like like crazy things the medici class uh the popes and all sorts of things so this is a tour de force of um culture and

societal revolution i feel i feel like at some level i was in the most interesting history class i've ever attended because it related all the most interesting things about um you know the wheel of history to like all of the most interesting things about technology and society and the internet and cryptography today and it was all jam-packed in like an hour and a half so what it what a cool podcast man yeah i was telling a banquet some marketing guru meme lord michael wong about this podcast and he says it sounds like some intersection of ap european history and

ap ethereum and i think that's exactly right that's exactly what's going on um and and i think we should just go ahead and get right into the episode but first a message from these fantastic sponsors that make this show possible bankless is proud to be supported by uniswap uniswap is a new paradigm in asset exchange infrastructure instead of a cumbersome order book system where trades are matched with other humans uniswap is an autonomous piece of software on ethereum which is what ryan and i call a money robot no human

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on your collateral go to www.synthetics.io where you can stake your snx or eth and earn fees from synthetics bankless nation we are super excited to introduce you to our next guest this is josh rosenthal he holds a phd in medieval and early modern european history so he's a historian he also received a fulbright scholarship to sorbonne's institute for advanced studies he's worked at a think tank mixing culture history and technology

which is what we're going to talk about today but he's no longer a practicing historian he is now a partner at sixth event cataclysmic capital which supports early stage founders targeting cataclysmic impact one of those impact areas is certainly in the crypto arena josh welcome to bank list it's fantastic to have you how are you doing hey i'm doing very well pleasure to be here guys thank you very much josh this is a lens we have not yet explored on bank list but david and i are super excited to do so this is like the historical lens

before we get into this podcast i want to ground the listener with sort of a mental road map of where we're going because i think we're hitting four important aspect areas in our conversation with you today josh and we're going to weave in and out of them the first is we're going to talk about the middle ages an era of centralization uh and then the renaissance and reformation an era of decentralization and compare that to the era that we're in call it the nation state era and this new crypto renaissance that is upon us that's one

of the through lines here the second is how technology is a catalyst so we're going to talk about the communication technology that made the renaissance happen the printing press we're going to talk about double entry bookkeeping the ledger and how those are similar to the internet a new communication protocol for the world and crypto which is a ledger for the world and then we're going to talk about how these changes affect society from an economic cultural perspective to an institutional shift that's number three and fourthly i think we're going to leave the listener with

some action items how they can position themselves for this cataclysmic change that is upon us you ready for all this josh yeah thank you very much ryan i think that's a a great summary i'd i'd like to take us back to a moment in time that we might not typically think about that's in the later middle ages um and you know sometimes you hear it spoken of as if it's the middle ages or a dark period that's probably not the best word i think the best word to describe it is aggregated and so i'd like to walk through two different three lines value and information and then

look at how new technology new financial technology and information technology essentially unraveled these power hierarchies and what happened next so starting with the middle ages if we were to describe the middle ages in one word aggregated would probably be a good word to use and so if we were to think about value value was really aggregated and by that i mean that wealth was concentrated you know wealth is fundamentally land and the roman catholic church is the largest land owner owning up to through the land in europe and options for economic output are were

you know primarily agricultural you know there's land and animals and crops and there's some guild-based manufacturing but that's a that tends to be you know fairly small people tended to follow in family vocations whether it was farming or craftsmanship and so on the whole wealth was super concentrated and it tended to be displayed in precious metals you know there's some patronage of the arts but these were subject to sanctuary laws where the power structures were regulating how money could be spent you did have decent amount of finance but that likewise was subject to usury laws um interest limited the the powers that

be controlling how money actually flowed and so wealth was accumulated through generational consolidation you know generation after generation slowly concentrating wealth and as you might expect power likewise was consolidated in the middle ages there was a contest for power there were two hierarchies uh one was political and one was religious and they were at odds for for a number of centuries and this ultimately ended up with a clear win in this contest for authority with uh with the religious coming out on top where the holy roman emperor was ritualistically humiliated

by the pope in the 11th century that was largely because religion wasn't a private affair it was the social and cultural institutional ties that united economic power and so when the pope had excommunicated the holy roman emperor all the economic contracts and political fidelity that was obligated to them where it was all rendered you know instantly uh mute and so the holy roman emperor begged the pope's forgiveness and at that point the religious hierarchy really took dominance and they achieved a type of stasis for for several hundred years up until the birth of the reformation

where it was symbiotic stasis and so in the middle ages if you have concentrated wealth and consolidated power naturally as you might expect culture was largely top down and so that flowed from the church in the nobility and there were limited number of fine artists and they were commissioned by a super concentrated elite it's mostly painting some music very limited amount of text there was definitely popular culture that was bottom up but it was controlled and channeled through through approved means things like morality plays and carnival

most of the culture was extra textual which means it was based on oral interaction and so if that's an idea of value being concentrated where wealth is consolidated and power is consolidated and the culture flows top down the way that the power structures achieve that type of stasis the way they held on to to power was fundamentally by centralizing information and controlling who had access to what information and how they're able to share it and so the other through line i'd like to look at for just a minute before we look at what changed in the the reformation and

renaissance is around this idea of centralized information in the latter middle ages just before the birth of the reformation and renaissance information wasn't just centralized it was it was fundamentally guarded by authority and so political and religious uh entities were mutually reinforcing uh creating documents that were controlled by a scribal class they're encoded in a language that most people couldn't read very few people could read and most of them couldn't read latin and the documents themselves were in a particular siglia a type of

shorthand that very few people could read they're stored in archives they're hard to access they're hard to keep safe and even if you did have rights quote unquote in the documents there's very limited remediation the courts were at the service of the the nobles and the clerical estate getting access to those documents was incredibly difficult partially because the transmission of them was limited so if literacy is around five percent most people stay within 10 miles of their home throughout a lifetime these manuscripts are incredibly rare and scarce and

inaccessible they cost more than the annual salary of a person and typically the manuscripts are created at institutions which are centralized for their creation this is the rise of the university and you know the monasteries and the nunnery so just to take a step back and summarize what we've talked about you know in the latter middle ages you know there were two particular two particular power dynamics that served to create these hierarchies the first was aggregating value and concentrating wealth and controlling who had access to money and how it was used and the second was centralizing

information controlling how ideas about money wealth and culture could be shared and these were fundamentally centralized and it's against that backdrop that we can now take a turn and look at the renaissance and reformation and and what changed and what fundamentally changed was the advent of two new types of technology which gave rise to a new class and a new expression of art and identity but let me take a moment and pause here before we go on to the next chapter in the story yeah so josh let me uh reiterate to you

the through lines that i'm seeing here whereas uh it's really the church that dictated the world right and they were able to dictate the world because they had all the wealth and wealth was largely defined by land and and then also through that power they also had a monopoly on information or what was true what was true was dictated by the church and uh and you you alluded to that there was some bottom up cultural manifestations right

like uh some bottom up celebration of culture but it was through perhaps what we would call permissioned uh vehicles right like it was only bottom up in so far as the church allowed that culture to manifest and the reason why the the church was able to do that was because they had all the power they had um they had the wealth they had the land uh and they had uh the they had all the the data if you will in forms of of knowledge

where does um physical power come into this conversation does might and and the sword uh fit into this conversation as well yeah absolutely that's a that's a that's a great question and so uh yeah these power hierarchies are land and economic but also uh also uh military um and so that was that was the great tension in the early part of the middle ages where the uh the political estate which would be the holy roman empire was at odds with the church and so there was a question for for who would ultimately control

temporal or physical or military authority and the church had claimed that they had uh they had authority to wield that temporal power and as you might expect the political apparatus disagreed and so in that great contest that lasted uh that lasted a number of centuries ultimately the church won that they won that at uh at canasa where the holy roman empire that the head of the entire political state and all the military apparatus was in the ground on the snow wearing penitential rags begging the pope's forgiveness because the pope had

excommunicated him so all the ties of military allegiance between the emperor to his knights and to everyone else in the neo-blast was all predicated it was all linked in a causal chain around being a christian and being baptized so when the pope excommunicated the individual all of those contracts including not just economic contracts but military contracts were rendered null and void and so at that point you know most historians would say that the church took you know supreme dominance in terms of that hierarchy but then you know that was around you know the 12th century after that for the next

two or 300 years the church and the if you want to call it the state achieved a type of symbiotic stasis where they're both power hierarchies and they became more and more and more inextricably linked can we talk a little bit about the the day in the life of an average member of society so what what you just set up for us in in the middle ages time period was kind of the life of i don't know if i call it a peasant let's say the life of the the average person was very much uh permissioned was very much

um you know top down was very much the the opposite of what bankless preaches which is self-sovereignty and freedom and and very much restricted in the ways you could participate in the culture in the ways that you could participate in the economy i mean no such thing i'm sure as a an entrepreneur what would an entrepreneur do in in this era very hard to rise above it seems paint the picture of a day in the life of an average peasant and average family an average

unit of society now that's a great question i think that's i think that's right on all accounts the vast majority of individuals were farmers and uh it was fundamentally agricultural subsistence-based farming and so you had you had never been more than a few miles from your farm you probably didn't own your farm your farm was owned by a land owner you might not be allowed to leave without permission this hierarchy isn't just hierarchy in terms of economics and military but it's hierarchy in terms of permission around identity what you can do how you can

move what you can acquire how you can use the things you acquire how you can express yourself what you can say what you can think and so in these two great hierarchies you start off with the emperor and then go down into the the various princes and cities and then into the knights and then all the way down into you know agricultural workers you're at the bottom of the pyramid and on the spiritual hierarchy it's the same thing you start off with you know the pope and then you move into bishops and various curates and then down your local breeze then down to yourself so the short answer is you're

working in the fields from dawn till dusk every single day and that's literally all you're thinking about there isn't additional capital you know at your disposal and you do have exceptions where you have some build-based manufacturing and you might be able to be a blacksmith or something like that but you can't just set up shop and hang out a shingle your father had to be a blacksmith or you had to have permission from the guild to be able to set up shop and you had to have permission from the the the noble authority to be able to have a title which allowed you to actually

practice so at every fundamental junction of life things were permission not just economically but also around identity and the way they controlled that was through the permissioning of information you couldn't share anything that popped into your head in terms of speech and and documents were were the sources of control and those were carefully guarded those weren't at least in the in the population you know whatsoever is that helpful it's a little difficult for us to imagine today i think the the the image that's being conjured in my brain is that there's there's a very strong

lack of churn in this world right the if you are a aspiring young lad who wants to do something cool with your life it's just you're just not in the environment that facilitates such an aspiration right you and perhaps you don't even have the the capabilities to even think about something to aspire to because you're just not in an environment that caters to such creative new thinking you are kind of locked in this in this world

that seems very fixed and i i also want to put an image of into the listeners heads because i think this is going to be one of perhaps the overarching through line for this entire podcast of the difference between the tower and the square or the hierarchy and the network right and where you know hierarchies over time grow larger and larger and more rigid and and versus the network or the town square which is a flat uh flat topology where everyone is treated equally and there seems to be a pendulum shift that goes between these two ends of the

spectrum and right now in in the late dark ages we have an extremely high hierarchical religious structure that dictates the world top down using their power of wealth culture knowledge and influence and that's where this story starts or at least this podcast starts which is the late middle ages with a very hierarchical structure that really determines what the individual can really do with their lives i don't want to get ahead of our story but it's it's important to understand that those ideas probably wouldn't have even popped into their head right it was

the water the air they breathe the water in which they swam and so you know we're in a very similar situation today where you know political and ideological hierarchy is merged into a nation state and and we're at the subject of its permission and all sorts of facets of our life and we we tend not to think about that on a daily basis just like the average you know medieval farmer wouldn't have been thinking about that you know for example i tried to i tried to uh purchase a bitcoin conference pass for a team member right and uh you know i purchased that you know down in miami and uh

the payment was declined and when i spoke to american express they said yeah we know it's not fraudulent we just we don't like the subject matter and we don't want to process that so we won't let you spend your money in that way that's the policy of their permission on that um so so we're in a very similar situation just like it didn't enter their head it tends not to enter our hat and when we say an entrepreneur starting something that wouldn't have been a category they had and you know very similar you know we'll see the rise of the mercantile class where people do set up shops it was very difficult for them to take a

step back and appreciate the historical significance and say perhaps i can do something other than be a farmer just like it's it's difficult for us to take a step back and say perhaps i can do something other than work for a company perhaps i can work for a dow that would have been that would have been something that wasn't quite on their mental map at that point in time and josh this was excellent for shadowing of topics that we're going to address uh later in the in the podcast and i i get i hope the listener gets the sense of what it's like for the average agrarian peasant i mean you were literate you were poor basically every

day was just trying to survive um this undercurrent that leads to elements we're going to talk about in the renaissance and reformation is the sense of disillusionment with power structure um i i can you talk a little bit about how that was bubbling up because you were talking about how well you know a lot of people in this situation wouldn't have known better it was kind of the air they they breathed they wouldn't have known there was another possibility and yet the seeds of the renaissance and reformation were starting to be planted

and there was this sense of disillusionment with the power structure can you talk about that before we lead into the next chapter of our story yeah absolutely there's definitely a sense of of disillusionment and and you know death was a way of life um and hierarchy was a way of life and so when you think about mortality rates uh you know the the primary popular culture was uh death is among us it was it was morbid it's ours moriani you know skeletons dancing and it's not just because you see you know members of your

family dying in front of you on a regular basis it's partially because you have a lack of agency um and so what what are you gonna do um what choice do you have but to accept the hierarchy you can you can revolt and at times you did have you know peasant revolt some those are quickly swiftly and effectively put down and so essentially you're operating in an ether where you didn't have information to other people in a community and when you're isolated that tends to create a marked sense of disillusionment it was in everyone's best interest to keep things in a status quo and so

um in some sense it was probably fortuitous that you know life was you know nasty hard and brutish and that your subsistence farming because uh if you had too much time to think you you wouldn't have liked your chances for improving your situation and as you mentioned before the bottom-up culture that you do have bubbling up is largely around celebration and blowing off steam around harvest and carnival and it was it was very uh very functional and very utilitarian you know the nature of the change you know there's definite cultural undercurrents where occasionally people people

question the hierarchy but that uh that tends to be put down very effectively and the reason why that was put down whenever that would bubble up it would bubble out throughout the middle ages but it was put down with great precision speed and and an effect partially because the power structures controlled the information those ideas couldn't spread they're able to quarantine them very effectively and so that's one of the fundamental transitions that happens with a reformation the ideas that were always latent in the latter middle ages actually

actually had a way to express themselves in a way that was not only permissionless but that was very difficult for the institutional power hierarchies to uh to put down so i think we've set up what the middle ages was like for the average commoner what this how the society was structured how the economy was structured but then came this change and that gets us kind of to the second chapter that we mentioned this age of enlightenment this renaissance and reformation so can you talk about how that change came to be and what it

represented for people yeah that was that was a fundamental change it was absolutely cataclysmic and i think we under-appreciate the nature of that change that's why i i definitely appreciate taking a moment and sketching out the kind of bleak uh switch situation of an average individual in the middle ages is we take for granted now the ability to to act without permission to a certain degree or to share information or to communicate value but that was that was only a result of the renaissance and reformation and so what happened was there was an advent of two types of

technology one around sharing value and another round of sharing information and both of them were decentralized or distributed or permissionless and them coming together created a situation that a number of individuals participated in it gave rise to new whole class of of people a working class mercantile class entrepreneurial class and that class of people it wasn't just that they were something new it was the idea that something could be new after a thousand years of stasis there was new technology which gave rise to a new community and they expressed

itself through a through a native type of art which was likewise a technology so just to take a step back in the the renaissance and reformation if we follow these two through lines value in the middle ages was aggregated and that becomes distributed in the renaissance and reformation and that happened through around the advent of a new type of financial technology something called double entry bookkeeping or ledger based technology and for your audience they may be familiar with this but uh in in the 14th century this was this was radical it was magic the idea of a ledger where assets equaled liabilities and equities with

the left side of a book being you know debit and right side credit it was popularized in the 14th century by a florentine merchant in the south of france and the renaissance is really a rebirth or a rediscovery or return to the sources ad fontes and this double entry booking was used in the roman empire plenty of elder mentions in the 70 a.d and there's jewish communities in north africa using it but essentially the medici family in the medici bank went back to the sources discovered the technology and popularized it and used double entry booking to completely

rework the financial system it it allowed previously you had to stop everything and have a centralized accounting if you can imagine not knowing you know where your dollars are flowing at any given point in time i'll leave the parallels off for now but it was it was like magic to be able to have an accurate accounting at any point in time and it massively uh increased the power leverage velocity composability and granularity of money preventing duplicitous books and false forks and it gave rise to you know credit in a very specific system as well

as a new host of financial products and the medici and not just the medici but the whole host of families and banks that that use this uh really became new players on the scene it was a new group vying for power for a thousand years it had been church or military political and now there's another group of financiers um and so they they bought their way into noble estates by buying titles and they also bought their way into ecclesiastical or church estates but fundamentally it was an economic rise to power powered by this ledger based

technology which uh which uh which essentially turbo charged their economic fortunes and allowed them to buy their way into status and then you know following this line of value these new players express their status through a new type of art and it wasn't just machiavellian i have money and i want to buy art to reshape and recraft my narrative on how i establish my money and what it means for the society that's true but it's a bit deeper than that they cemented their status around using a new type of art and so in the middle

ages everything was flat and symbolic you can think of it as 2d people didn't look like people they look like caricatures and if you're in the middle ages you've never seen a window or a mirror and so the idea of seeing a reflection of you or a representation of an image that looks realistic was unheard of and as the renaissance artist turned back to the roman and classical sources they were able to create hyper realistic renditions it was it was their vr and ar of the time where they're able to go back and paint pictures and do sculptures where it was

just like being there and where you saw someone else in an image it was like magic and so the renaissance art was really an exercise in technology around this rediscovery of source material and these are names which we still know today it's botticelli and leonardo and michelangelo and this is how florence becomes the the cultural center of europe and so part of it's a flex around this new mercantile class but part of it is a qualitative and quantitative alignment of identity around not just the idea of their status but the idea that someone else could be new um the

idea that it wasn't just you know church and political power as it had been for a thousand years but that uh but that uh a new player could enter the game as we chatted about the middle ages the idea of something new when it had entered their minds now here was something new and it had entered not just their minds but manifested in the world through this technology and so the medici ran with that they actually ended up taking the papacy as you know leo the tenth was medici and took the throne of france with catherine married in so this became de facto they essentially took over this power hierarchy this

financial class and when they took it over they changed the nature of what was meaningful whereas in the middle ages there was sacred and profane there was holy and religious and there was everything else with this advent of the class you know tied to some of the doctrines that martin luther and the reformation were espousing at the time this new financial class re-thought what it meant to uh to be holy and to be doing god's work uh it wasn't just in a monastery it was actually doing your job even engaging in finance in the world