116 - Why Bankless Is Wrong | Ethan Buchman - Cosmos

Let's answer this question for us, if you could. Why is Bankless wrong about just about everything?

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. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Alright, guys, special podcast episode for you today. You've been listening to Bankless for a while, probably, and that's good. But

are you in a silo of information?

Where is the bankless thesis actually wrong? Is the question we posed today. We brought on someone who shares many of the same values that we do at Bankless, but has an alternate view of how to get there. A few things that we talk about today is Ethan Buckman tells us why we're wrong. Number one, are we gonna live in a many chain future or a few power law winning chain future? Number two, can a chain win without actually being money? Bankless doesn't think so. Ethan seems to. Number three, uh Ethereum shared security, we're gonna have that model of the world, or an app chain model. That's what Cosmos is driving towards. And what are the trade offs of both? And fourthly,

I think this is the big question of the episode. What is the best way to build this crypto world without turning it into a dystopia? Either an anarchy dystopia or an empire dystopia? That was the setting for the conversation. David, what were some of your thoughts uh as listeners going to this episode?

Yeah, Ethan does the same thing that we do, where we look towards history and extrapolate models and lessons from history into the future for crypto networks. So it's interesting when we are we're both watching the same story. We're both looking at the same data, but we interpret this data differently as it relates to the future of crypto networks. Uh so you know, Ethan sees a world of city-states and says, like, oh, the the future of crypto will be a bunch of app chains, city-state-like app chains. And Ryan, you and I we see a world of nation states and empires that have come to dominate the globe. And we think that that means that the future of crypto will be dominated by a few chains that can uh create just a network of networks, because that's what an empire is. It's a network of networks. Empire is kind of like the wrong word. Uh, it's got a negative connotation. We talk about that in the show. Uh, but basically, listeners in their head should be thinking about just what is the long-term equilibrium of the topology of networks. Is this going to be a concentric circle model where uh network effects begets network effects, capital begets capital, liquidity begets liquidity, and all of these find a center gravitational pull to a center point? Or will there be pockets of value all over this topology, some big, some small, but no one real center point? Uh that is kind of the meta question being asked here. Uh and so uh Ethan, uh, like I said, just does a fantastic job of also looking the history, uh, looking towards previous governance structures, pee uh previous pockets of value in the world, uh, and tries to extrapolate these things out into the future. Uh, really good episode. Really good episode, Ryan.

Yeah, I think the the reason this is relevant for everyone is because uh you gotta kind of place your bets, right? Place your bets as a builder, place your bets as an investor, place your bets as someone on the bankless journey as to which of these visions is more true. And probably the truth is it's gonna be somewhat in the middle. There's elements of truth uh to both of these ideas, but um, I do think one will win out over the other in time. So we get into all of this. We're gonna get right into the conversation with Ethan Buckman, but first, I want to tell you about these awesome tools for going bankless.

Hey Bankless Nation, we are super excited to host this conversation with Ethan Buck Buckman. He is a fantastic human being. He's also an internet biophysicist, which is kind of cool. A monetary localist. That's from his Twitter profile, and the co-founder of the Cosmos ecosystem, as well as the president of the Interchain Foundation. Ethan, thanks for joining us. We're going to talk about city states versus empires today. And I think this is going to be fun. It's great to have you on, man.

Thanks so much for having me. Yeah, it's good to be here.

So I want to set the context uh for listeners here. I um I think the goal of this conversation is not necessarily to like

Have you change our minds or for us to change your mind, right? That would be overambitious. We're not going to accomplish anything like that in the podcast. I think the goal is really understanding. So we want to thoroughly understand your perspective, how you see this whole blockchain thing uh shape, shape, shaking out, because I know many of our core values, the reasons that we're in crypto are the same, but you have a different vision for the future than probably Bankless does. And let me just go, I hope this goes without saying uh we bankless have have a tremendous amount of respect for everything that you guys have built in the Cosmo ecosystem. We think it's net accretive, it's added a lot of value uh to crypto, and we're aligned on so many of the values um that that we both share. But with that said, let's dive right into the question at hand. So um this is kind of the the title of this episode, but I think it's probably something that you believe. Maybe it's a bit tongue in cheek. But let's answer this question for us, if you could. Why is Bankless wrong about just about everything, Ethan?

All right. Well, well well, thanks for that. I I mean, let me say, um, you know, um uh I I think we do probably have a lot in common. Obviously, we're coming from from similar places, and uh, you know, I think the

the starting from the title of the show, Bankless, like, you know, we we obviously agree there's um a lot fundamentally wrong with the banking system, and that and that's why so many of us, you know, so many of us are here and and and I think you guys do a great job of like exploring exploring the space. And there's a lot of good um, you know, good technical and and philosophical content on the show. So uh I'm happy to to be here and to be able to add to that. I think at the end of the, you know, what it really comes down to, you know, and claiming you guys are basically wrong about everything, that's just you know, Twitter diplomacy. Um so here we have some podcast podcast diplomacy, which allows us to be a little bit more nuanced.

We're trying to hype the views here, Ethan.

Um so you know, I think uh I I think it i it's really a matter of emphasis.

And you know, I've I've seen um uh you know on the show and in in some writings a lot of focus on things like, okay, going bankless, uh things like monetary premium, things like um uh you know this empire model and uh and and what's another one, DeFi, right? Uh and and what I prefer is is to emphasize um something a little bit different for each of those things, right? So rather than bankless, I would rather think about being co-op full

uh rather than monetary premium. I would rather think about monetary clearing um rather than empires. I prefer to think about city-states, and rather than decentralized finance, I prefer to think about regenerative and or collaborative finance, right? So it's it's a little bit of a shift in in emphasis. Um it's not so much that you're wrong about everything per se. It's just that maybe uh uh maybe you're incomplete or you know, maybe we're not we're not going far enough. And so, you know, we we can unpack all those things and and and talk about um what they mean and yeah.

And Ethan, just to set the stage and put an image into our listeners' heads, I think a great way to uh frame this context is or conversation is to how we differ on what the whole like network topology of crypto networks looks like. I think the bankless thesis is that there's general some sort of center, there's some sort of like epicenter, there's some sort of gravitational center to the industry. Uh, and that's kind of summarized in the concept that liquidity begets liquidity, capital, big, I guess capital network effects begets network effects. And at some point there's this concentric circles that all come to a convergence point. And that is a little bit illustration of like the empire model where uh one center blockchain with a many, many layer twos kind of feels like all all roads lead to Rome, right? All layer twos lead back to the layer one. Uh and that's kind of our model for the topology of network effects, this concentric circles with a focal point. Uh and so do you like this like topology uh illustration? And if you had to illustrate what the topology of networks looks like at maturity, how how would it look in your brain?

Yeah, I think it's uh it's it's definitely multi-scalar, and I I think there are hierarchies, uh, you know, necessary hierarchies within it. Uh I don't know that there's one thing at the root. I think there will probably be a few at least. Um and and I'm happy for you know Ethereum to be up there. I I certainly think they're, you know, I'm long Bitcoin and and Ether uh Adam, of course, but um, you know, so I think I think there's room for for a few things at the root, and that they do they do serve different purposes, and and you know, there certainly could be more. Um But what what's most important to me is you know when we use this analogy of empires, like there there are there are critical issues in the world with sort of how we've structured society and and and using a model of domination and oppression as like the way we want to structure how we're how we're building next to address these critical issues, uh doesn't seem like the like the best approach. And and maybe there are aspects to it that are, you know, you talk about capital begets capital, liquidity begets liquidity. There are there's certainly uh there's certainly truth to this, but I question whether it's um whether it's right or whether it's always good or what what generates that. And and and the challenge for me with the kind of empire model is one of representation of stakeholders and of information in the structure uh of the empire, in the state machine of the empire, we could say, right? And and the the sort of broader you go and and the bigger you go, um, the less able you are to represent the actual needs and interests and values of human beings on the ground and of um and of nature in some sense. And so, you know, the the Cosmos thesis has really been that it's really, you know, this technology we've built is really important. It's really important to have these big, bad public blockchains that are, you know, dedicated to the pursuit of like a small set of ideals, like you know, Bitcoin and Ether, let's say, or Ethereum. Uh, but it's also extremely important to move this thing forward that we develop software and technology that makes it easy for every community to have their own uh uh computer, essentially, right? So I think about this as like the community computer revolution. And and when I hear you know about empires and blockchains that are that are supposed to be empires, it's like talking about mainframes, right? It sounds like some IBM exec in the 40s that's like nobody needs a personal computer. Uh, we just need like, you know, one or a couple mainframes, uh, and they can run an IBM's basement. And okay, we can compete with Dell or or whoever uh mainframe. And that's it. And all the world's you know, compute needs can be kind of based on that or or derived from that. And obviously that's ridiculous. That's not what um

That's not what happened. It's certainly what a lot of people thought back in the day, you know, uh that we'd never need more than, I don't know, a few hundred kilobytes of RAM, or that no one would have devices in their pocket or or or at home. And and instead, these forces of of sovereignty and interoperability took hold over the structure of the internet and the evolution of computing, in that now we have, you know, billions of devices. Everyone has their own computer. They're sovereign over it. They can, I mean, maybe not as sovereign as we'd like in in a variety of important ways, but um, you know, they can install whatever software they want. Generally speaking, they can swap out pieces of hardware, they can decide who to who to connect to and and and so on, what programs they run, and yet they're still all interoperable with each other. And you know, that was the kind of personal computer revolution connected up over the internet. And what I think Cosmos is about is really bringing the community computer revolution to light so that every community can develop um its own computer that represents their values, their needs, uh, and and their interests, and is still interoperable with all the others. And you know, the the sort of empire model of security, it may have a role to play in that, uh, but I'm not sure the empire analogy is the best one for it. I sort of prefer I prefer ecological um analogies and and I look at um

You know, the cycles uh that we depend on, right? The the sunlight, the water cycle, nitrogen cycle, things like that, right? And so I would sort of look at these, um, maybe some of these root blockchains like like Bitcoin and and and Ethereum, maybe, as more akin to, you know, sunlight and um and the water cycle or something like that in the scheme of of life and you know, ecological blockchain systems that that we're that we're trying to develop rather than you know empires that are gonna go dominate the whole world and and secure everyone with their armies and you know force you to pay rent.

Yeah, and certainly the empire metaphor breaks down at some point. There's a much huge difference between the actual physical empires of history and uh using that model to understand crypto networks. All these crypto networks are inherently opt-in, which has a huge check on the network themselves. So from what I think I've I've gathered from you is like rather than just like the concentric circles model where there's something at the at the focal point, they're just like pockets, just pockets of value all around this like you know uh landscape. Uh and some are big, some are small, some are very big, some are tiny. Uh and then there's like this connective tissue, this like fabric that interweaves all of these things. Is that is that like the right illustration to put in listeners' heads?

That's right. Yeah, it's a more emergent topology. And you know, the best place to see this actually emerging is on mapazones.com where you can actually see the different Cosmos blockchains and see their connections with each other. And no one, you know, no one conspired to uh to construct that topology. It's fully emergent, and each chain chooses who it wants to connect to. And you know, right now there's like, I don't know, 45 chains on there. Um, and you know, someday there will be hundreds, if not, if not thousands or you know, millions, or if Celestia has its way, billions. So um uh yeah, so that's uh I think that that's really important.

Yeah, that's really cool. And uh we'll we'll include a link to uh to to that website in the show notes so people can get a flavor. But um you're essentially talking about Cosmos has always talked about this world of of many chains, mether many interoperable, almost like you know, in kind of the Ethereum world, you you call these a whole bunch of side chains or app chains has been or city states is maybe the the the analog. Um

We'll talk about some of that and some of the maybe the pushback um from bankless, but fur first we want to understand it fully. So you mentioned four things uh uh as well that you believe rather than kind of the the main bankless thesis. And the first thing you said is rather than think about bankless, you you you think about co-opt full. What does that mean?

Co-op like cooperatives, right? Um so uh I think the the the history of banking and the and the problem with banks are in a deep way actually tied up with problems with with corporate structure and corporate governance and shareholder primacy and and all these kinds of things. Um and I think uh you know the the structure of capitalism owes a lot to its you know the the challenges with it. It's not just about the banks, it's also about our corporations and our corporate structures and you know just uh just getting rid of the banks but keeping all the all the sort of corporate structuring um might not solve our our problems as deeply. And I think uh, you know, banks in in a certain way they're they're they're there to play an important role. Obviously, they've gone, you know, completely um

completely off the cliff and and and are not actually serving people the way uh you know a healthy system system might but you know a big a big part of that is um is the nature of corporations and and the sort of shareholder primacy and so what I'm especially interested in addressing some of these issues are cooperatives and in particular worker cooperatives right uh where they very directly within the you know within the state machine of the organization of the corporation represent directly the interests the ownership rights the governance rights of the workers right and if we just go bankless and we don't actually fix corporate structures and roll out cooperatives um then I think uh I I think we won't actually achieve our aims and we'll have all kinds of you know various various perversions and so so for instance our our our company I think uh you might have missed this in the intro I'm also the CEO of informal systems which is structured as a workers cooperative right so every every member of the of the company um every employee is a is a uh one person one vote owner you know uh uh member and and we're sort of starting to explore this with DAOs and stuff in the in the crypto ecosystem but there's still very much you know uh token voting going on there and you know I expect we'll talk about token voting a little bit later in sort of critiques of you know Cosmos proof of stake which is you know totally valid but um so I so I I think there's an emphasis you know distinction there on on not just going bankless but also going co-op full and there are banks that are structured as co-ops they're they're consumer co-ops they're called credit unions right uh and so you know we can do a lot to go you know to push back against the big banks by supporting our local credit unions right um and I think they have an important role to play and we should be looking at how our technology you know can actually help them and and people love their credit unions. I mean they're there to serve their members right um they're not there to screw you they're not there to siphon out profits to some foreign shareholders um they are you know they are they are really there for for for membership and that's the kind of way we should be thinking about things not just in this like oh self sovereign opt out screw the banks you know you know have a Swiss bank account in your pocket kind of thing but more like okay how do we reconstitute something in a um you know more positive looking uh you know so rather than bankless co op full

That's cool. That's cool. So we're seeing a distinction, a distinction and emphasis because uh bankless would certainly agree with the the vision of more co-ops. But but our emphasis, you're right, Ethan, is um on not needing governance system, not needing banks at all. Whereas maybe your emphasis is let's let's turn the existing banking services into co-ops where individuals in a community might own it. Our emphasis is a bit more like uh be your own bank. Like if we have something like Uniswap, then we don't actually need an intermediary to all, whether it's a co-op, like governance governance list is better than having some element of uh governance. I do agree with you though, like um credit unions are better than banks. So um, our first business account, we actually got kicked out of Bank of America, okay, because we had a crypto transaction from Coinbase to like our uh Bank of America. So they booted us, they sent us a Dear John letter. And so where where are we banking now? Because uh, you know, show secret bankless cannot actually be fully bankless right now. We have real world bill bills to pay. So we get our services from a credit union. They've not they almost kicked us out last week, but they didn't.

So uh we are still bank to the credit union, credit unions uh serve our needs. So we are believers in in the the co-op vision, but those are that's expressed a bit more on the Dow level. Ideally, under that level is our governance less protocols that don't even have a co-op member vote model because humans are fickle and prone to like uh plutocracy. And so if you can remove all of the governance dials from the system, that's a little bit better. How would you react to that? Do you see that distinction?

Yeah, I mean I I I I see it. Obviously there are there are val you know, there is value in um you know, governance minimization at certain layers, but not at every layer. And I think um, you know, humans are inherently political animals.

Um and and and and it's important to give voice to that, right? And it's not just about exit, it's also about voice and and you know, obviously about loyalty. Um and and and we need our systems to actually be able to represent that kind of that that kind of function and and coordination ability. You know, governance is is a coordination protocol. And yes, there are ways it gets um corrupted, and that's why important that it's important that it remains local and accessible. Um but but to say that you know it has no role, I think is uh is missing something very important. And a lot of my a lot of my philosophy, I mean, I call you know I don't like to get put into boxes, so I won't like sign up for anyone else's label. I invent my own labels. Um one I one I really like is sustainability existentialism, which is sort of derived from my background in biophysics and studying the theory of organisms and you know, theoretical ecology and like you know, what makes a sustainable system, right? That that's what that's what I'm here for. Like, how do we, you know, how do we structure society to actually be sustainable, right? Um and and my understanding of what that takes is effective multi scale representation of the environment, of the things that drive you within the system, right? And so if you don't

Uh make way for some form of politics and governance, you are going to insufficiently represent the stakeholders, represent the system, and that will lead to some kind of you know issue down the road, some kind of uh unsustainability. But you know, I think it it it it's a multiscalar issue. And so at different scales, you need uh you need different protocols, right? And at some scales, generally at larger scales, you you do want some level uh uh of governance minimization. I mean, no one has c control over the sun, right? That's probably a good thing. If like we could block out the sun, that would probably be bad, you know? So okay, it's good that the sun is

Elon Elon Musk is putting a bit on the sun.

I wouldn't put it past him, but uh

Yeah. Whereas, you know, at at at other scales it is important to to be able to i intervene and um and you know, as as as humans sort of um decide what we want, right? And and and I think uh that's important. Yeah.

And I think elements of this conversation are going to uh reoccur throughout this podcast. Is at what layer in the stack does governance, should governance exist? And uh at what layer in the stack is complete sovereignty exist and and how do those things intermingle? I think that's gonna be a core theme of this podcast. And so move moving into one of the next things that you said, Ethan, earlier in the show is the difference between monetary premium and monetary clearing. And so I think that means uh correct me if I'm wrong, but the difference between a single asset accruing a bunch of monetary premium just because it's really useful, and a market, a marketplace that is really, really good at clearing itself. Is that the right distinction? And how would you add to these uh these two elements?

Yeah, sort of. And I think it builds on the uh you know the function of banks and stuff and and and what is the nature of money. And and and you guys have have put a lot of emphasis on this monetary premium idea, this store of value idea, which is you know another way of saying uh uh liquidity or or sort of monetary demand. Um and I have become a lot more interested in its inverse, which is velocity, right? So, you know, what makes good money? Is it is it stuff that that sits tight and just like accrues value under your mattress, or is it stuff that's always on the move and and and helps people get what they want and get what they need, right? And there there is a there is a sense in which when the velocity mechanisms, the clearing mechanisms, the ability to actually exchange and clear and and you know engage and trade and so on, when that stuff breaks down, there it uh the importance of the store of value and the monetary premium just kind of skyrockets, right? It's like a hedge against the failure of the exchange network, right? And so from that perspective, okay, this monetary premium thing is very important. But that's not the be-all end-all of money. And it's certainly not the case that good money is money which just accrues value indefinitely and and no one can use it or no one wants to use it because it's too expensive and you know it'll be worth more tomorrow. Like that's not what makes good money. Uh, you know, that's that's that's a piece of it, and it's especially important piece when your whole banking system has broken down and when it's gone, you know, completely corrupt and and and no one except for you know the biggest corporations in the world can access credit, then yes, okay, then maybe the store value thing is um is super important. And so I agree that it's important, but I think we have to go much, much further beyond it and not just focus on, you know, I I think we agree that um money is the killer app here, right? But we we have to have a more, I think, nuanced and and detailed conversation about what makes good money and what kind of money we're trying to design. And if if the only input to that is like deflation and you know, ultrasoundness, um, which is uh uh something I kind of hate, um then I think uh I think we're gonna mess the whole thing up. And uh, you know, I think uh uh to some extent, you know, I blame the sort of Austrian tradition for having been um

I think they their like development was arrested early on and they became reactionary because of the war and, you know, the the the um totalitarian fascist regimes and and and whatever. That's all that's a whole separate conversation. But I think we need to go a lot deeper into the into the nature and and history of money to understand um, you know, how we build systems that enable clearing in local communities, that enable people to actually engage uh more in trade and and um and and you know build actually more sustainable production chains. And it's not just about you know holding money and having its its value go up and having it be the most demanded thing uh and having this like infinite liquidity. It's actually about making sure the money moves. And if the money's not moving, uh it's probably not good money. It's it's sitting still, it's making certain people rich and other people not. And I'm not sure that that that's exactly what makes um what makes good money. And so what what we've been starting to focus on, especially at informal, is studying this problem of credit clearing uh and and and of focusing on, you know, how do we how can we start to engineer systems that enable businesses that trade with each other or or even people uh to actually clear their debts, clear their trade credits without introducing uh external liquidity or by introducing the minimal amount of external liquidity, right? And so, you know, the simplest way to think about this is, you know, David, if I owe you money and and you owe Ryan and Ryan owes me, we can clear all those debts without any liquidity, right? Just by servicing the fact that we have this closed loop of obligations, right? Now that's that's good money. I mean, that money didn't even materialize, and yet we were able to have a whole you know cycle of exchange, and and it's not sitting under anyone's mattress, it's not accruing, you know, value or premium or anything like that. It it's just the actual network of obligations. And I think that's actually the root of money is um you know, is this sort of like mutualism in in a sense, and you know, altruism and and and gift economies and all and all this sort of stuff. But uh trying to trying to bring that back into the modern world, I think is really important because we've lost it and so much of our economics has been structured to be kind of linear, right? And and something comes in and goes out, and it usually ends in in some rich person's pocket and then it stays there. And you know, you look at measures of monetary velocity and they're collapsing, and money doesn't move through the economy and people can't get access to it, right? And so focusing on this monetary premium aspect kind of devalues this actually super important thing, which is that we make sure that that money circulates, that people can can clear their obligations, that they can enter into obligate, you know, into um trade obligations without feeling like they have to go into debt to a bank and pay high interest rates just to be able to participate in the economy, right? And so, you know, by looking at at that kind of uh approach to clearing.

you can actually clear significant fractions of debt in an in an economy without any liquidity.

Without changing the structure of the obligation graph, like without changing who, you know, without introducing a clearinghouse, just by surfacing the information about who owes what and looking and looking for cycles, right? And anytime you find a cycle, you can you can clear those cycles, right? And that uh is is an incredibly powerful tool for, especially for small and medium-sized businesses whose you know primary constraint really is uh liquidity, right? It's like how how do I, you know, maybe you're solvent, maybe your receivables exceed your payables, uh, but if you're not receiving in time and your payables due, you know, you're out of business, right? And so by by actually uh looking at the network of obligations and and and enabling this kind of clearing, we can build much better monies that serve much greater uh you know fractions of the population than just you know some dumb thing that you know has has a significant sink and is you know deflationary and is accruing value and making people the whole that hold it early rich, you know? Uh yeah.

I actually think this is really, really interesting. And Ethan, I I think from what I've gathered hints, you've you and I have read the same book, uh Debt, the first 5,000 years. Um if if that book uh draws your memory, I'll I'll come back to that in a second. Um but the the spectrum that I'm getting here is that on on and money, there's a lot of monies out there in the world. And what money is isn't actually one thing, but we just have a bunch of things that have money properties and they exhibit different properties on the money spectrum. And I think what you uh just illustrated is that you're looking for a money system that has uh uh extremely high velocity, and in contrast with like the ultrasound money of it of that we describe Ether to be, which would be very much almost trying to get to as low velocity as possible, right? Like exclusively a store of value uh and much less emphasis on a medium of exchange. But what you're trying to go, you're I think what you're saying is that if we go so far on the medium of exchange side of things, uh we could do we might actually be able to lose the demon denominator. So if I owe you money, you owe Ryan money, and Ryan owes me money, but they're all these are all obligations of a certain type. Uh and so like maybe, maybe those types are are different currencies. Like maybe Ryan owes me die, I owe you Bitcoin, and you owe Ryan Cosmos. Maybe we could get even more esoteric and be like Ryan owes me a favor and I owe you an item and and so like some other like weird thing. But like the the pot the vision of of uh what you're trying to articulate is that the network between the network of obligations where money was formed out of a network of obligations for people, and then we just use this denominator to settle the settle the trades. What I think what you're illustrating is that if there's this network of obligations, cosmos of technology, or this, this uh the yeah, cosmos of the technology can actually settle these obligations independently and agnostically from the other commitments from other parts of the network. Uh and so the velocity is actually so fast that the currency doesn't actually manifest. Did I did I hear that correct?

I mean that that I think that's a major goal is that to have velocity so high, basically infinite, that the currency doesn't actually even have to manifest. I mean, it's in, you know, simultaneously everywhere at once. That is that is sound money. I mean, you want sound money, you can't even see it. I mean, it's it's travels at the speed of sand, right? I mean I mean, a dump that rock under your bed. That's not that's not sound money.

The the problem with that, Ethan, is that if that's true and then we've like had the velocity has gone so fast that we've eliminated uh the need for for money, then what do people buy? People like people like buying things with number go up. If there's no number go up, then how do you inject attention onto that thing?

That's a really interesting and profound question for our species because I think that, you know, I think this is associated with so you know, I think monetary premium has a religious origin.

And and maybe private property does as well.

And a lot of what we are reeling from, you know, in the last couple decades or something or 100 years is the collapse of the kind of religious substrate of our lives. And what we're we're sort of refining it in the memetics of, you know, internet culture, which is, you know, giving us new kinds of mythologies and new new kinds of salvation stories, like, oh, if I if I hold the token, you know, its value will go up and then I will be saved or whatever, right? Um and I think we need to get real with ourselves about that. And um I'm

You know, not necessarily just trying to play a game of of make number go up because I think there's there's more to life than you know watching numbers on a screen. Um yeah, I'm interested in in sustainability. And it's true that you know telling that story, it's a little bit maybe it's a little bit less catchy. Uh maybe we need to work on our memes a little a little more and a little harder and you know take seriously the religious nature of all of this and and and what it takes to attract people. Um but I think we do need we do need to question the games we're playing and and and what we're in it for. And if we're just in it for number go up, then like, you know, that's what the banks were in it for. So like what makes us better than bankers, you know?

I uh there's a lot of comments here, which is interesting. I I do think that um like humans, I've I've come to accept that humans are, you know, religious creatures in general and talk about biology. Like we're probably higher hardwired towards this. So it's going to be hard to collectively uh make a change here. And also, like somewhat when we get into the kind of the the more the pushback section, we can talk a little bit about like the world that you are envisioning sounds amazing. Like I would sign up for that world. That would be fantastic. Like, please, yes, let's do monetary uh clearing instead of monetary premium.

Yeah.

But some level, some of the times I've been wrong in crypto have been times where I was a bit too idealistic. And I was like searching for this kind of like this perfection, uh, hoping that humans wouldn't be greedy about things and not accepting the world as it is. And so maybe we'll get into that conversation as we as we go through in in some of our uh our questions about your thesis, uh, Ethan. But let's get to the next one first, which is this idea of uh empires versus city states. Okay, so and you know, David has said, look, the world the the word empires is kind of troublesome because it sounds like the the imperial Roman uh empire who will

Yeah, it's like Darth Vader and like you know, crucify you, behead you if you disagree and don't get in the path of uh the the Roman war machine, that sort of thing. But when we're talking about empire, it's like an opt in empire. It's it's sort of like every individual, every chain has the ability to kind of opt in and exit at any point in time. So I want to clarify that.

Empire uses its resources to fight for the love of its users.

Yes. So Empire of Love, maybe, but let's still use that let's still use that loose analogy here. All right. All right.

Is that what Vader said?

I mean that's what the American imperialists have always said. You know, we're protecting freedom and whatever.

Let's let's still use this let's still use this uh analogy though. You know, maybe the Empire thinks it's an empire of love, but you use the city-state analogy and and tell us about the distinction from the bankless thesis.

Yeah. I mean, i again, for me, it's a it it's a question of sovereignty, it's a question of um representing stakeholders in the state machine, right? And and I think the the empire model is important at a certain you know, the the empire model is important at a certain layer. Um

Maybe high up high up the stack to have a sort of low resolution uh representation of the world. But to actually cater to the needs of humans and our our ecosystems, we need much higher resolution uh machines, state machines that better represent stakeholder interests, right? And and the city state is is kind of a um a form of doing that. That's a much more local, smaller scale um, you know, polity that represents the people that are part of the city rather than trying to be, you know, an oppressive dominating empire that's sort of conquering and expanding and trying to cover the whole globe, right? And usually what happens with with those empires is at some point they get too good for them, the too big for themselves, um, and they break down because they are they they you know stew political unrest because they are found to insufficiently represent the interests of their citizenry, right? And and so people rebel and and and what do they do? Well, instead of you know, they form nation states. They say, to hell with your empires. We want uh we want a state that represents our culture, our language, our interests. We still want to, you know, cooperate with everyone, um, but we don't want to do it on these sort of imperial, imperial terms, right? And and so you you get this progression from from empires to to the nation states. Uh and I think the same, we're seeing the same kind of problem, the same kind of challenge face the nation. And it it's uh it's an information theoretic problem, right? It's a it's a problem of bandwidth. I mean, how much bandwidth does the state machine of the nation have to represent the interests of its citizens, right? And and it's not much. I mean, the the nation states are these massive entities, uh, they're they're so big that by the time they sort of accumulate and process information, like it's it's stale, right? And and I think we all know this kind of you know uh motivation for decentralized information and you know um markets or or or whatever. And this isn't like a market fundamentalist um kind of view that I'm that I'm espousing here. It's more a information theoretic and and sort of localist kind of kind of perspective that you know, arguably now, now that we have most people living in cities, right? And so this is from a geop geopolitical standpoint, the cities don't actually have any constitutional representation in most of their most of their nation states. They're like, you know, they're effectively corporations like owned by their province or something. I don't know the specifics, but it's something like that, right? And that is a big problem for the people that live within cities that basically don't have sufficient representation in the structures of government, right?

And so I actually see a big part of the sort of next next stage of political evolution to be greater sovereignty and representation for cities, right? And I think something similar is kind of happening in in the blockchain space, where these big, you know, big, bad public blockchains that are trying to be empires, uh, they're they're too big and their citizenry is too diverse for them to adequately represent their interests, depending on what they're trying to do. And we've seen this play out already in the in the sense that you know some of these chains have forked themselves. I mean, Bitcoin forked because its citizenry was too diverse to you know uh to be served by a single platform, and and some people wanted, you know, cash or whatever, and others wanted this more secure, censorship resistant layer, right? And and Ethereum forked because of the the DAO. Maybe it'll fork again, you know, with the merge. I don't know. But in in any case, I don't think having um you know a singular world computer is sufficient to represent everyone's everyone's interests, right? And like, I mean, there are lots of people that probably just don't want to use the EVM. I mean, uh, you know, why should we be stuck with this one sort of virtual machine that was, you know, conjured up um kind of out of nowhere and now and now we're stuck with it because it's like trying to be an empire, right? And and again, I'm you know, I'm I'm bullish ETH, I'm I'm I'm long on um on the Ethereum project. I think it's an incredible project, but I think some of the philosophy around you know the world computer and it being an empire and sort of the dominant thing, I think it's inhibiting a lot of important um innovation and representation for people that we actually need to achieve the sort of larger, um, you know, larger crypto blockchain vision of decentralized, you know, more sovereign communities.

One thing I'd say about the empire model is um, you know, like you could call some uh protocol standard that's governanceless, like uh TCP IP to be an communication empire for the internet. And really it's sort of like a governanceless standard that everyone opts into and everyone just agrees, but there are clearly network effects at play. But m maybe my question is is more like um