I think you are probably thinking about the same thing. You have an urgent problem. I think… If I don’t solve this difficult problem, I can’t finish the rest of the speech. Today I was bombarded with the same question on Twitter: "Have you tasted Haggis (sheep tripe, a Scottish snack)?" [Laughter] The answer is, "No, I'm too scared." I made a mistake: Before tasting it, I checked how it was made Someone told me that it was actually done in another way, it’s not so scary I tried to gather the courage and someone told me that the best way to eat is to eat in a hamburger I don't know if this is really the case.
It's not like this? Ok. There is a big disagreement in the room I count to three, all those who approve of [ __ ] burgers, please [raise hands]. nobody? Ok. How about Haggis making breakfast? [Listener] Not bad! [Andrés] Ah, all right. Should I try other recipes? [Listener] Haggis toast! [Andrés] Haggis toast, very good… [Listener] Intravenous injection. [laughter] [Andrés] How about the corporate sponsored Haggis? [Laughter] It was released this morning? Okay, let’s talk about the elephant in the room: Libra This morning, you may have heard that Facebook announced their "cryptocurrency" Libra Whenever the price of Bitcoin drops, I receive calls from friends and family, Ask me if it's okay. "Are you okay? Is everything okay?" This time, I actually received a call from my friend’s mother She asked me if it was okay this time the price has not even dropped! In fact, Facebook’s introduction of cryptocurrency led to the question of "Are you okay? Are you still insisting?" "Do we need to airlift you from Europe?" I'm fine.
I talked about it two or three years ago, one day we will see this happen Just today, right? It has happened But what happened? What can we talk about today? This morning, Facebook released a white paper. Not a cryptocurrency. Not a network. Not a project Not even an app Just a white paper. Everyone was terrified because they wrote a white paper. However, there is still a long way to go… Before the white paper and the completion of a network that can be used by 2 billion users, this network program needs to bring… Candy-colored Farmville shop But when they released the white paper, people became very excited. How many of you have read the white paper? Great, many people. To be honest, I just glanced at it briefly. This is a busy day I received many phone calls from reporters who wanted to talk about it. I'm not ready to talk about it This will require more research. I will not talk too much about technology today We really don’t know what will happen. I want to talk about what’s changed. Everything changed this morning. This is something we have predicted for more than three years Whether or not Facebook can put Libra into a production environment, it changes everything.
The mere fact that this white paper was deleted has already set the benchmark. They gave up the challenge Silicon Valley is making a big push into the banking industry. We predict this will happen Many people think that Amazon will be the first but it turns out that it is Facebook-which is worse… It could be worse than anyone thought. [laughter] Okay, about the white paper. If you haven’t read it yet, this is a collaboration between [about thirty companies] I have a feeling that within Facebook, some people will say that this is the result of a year of hard work I have a feeling that they created this incubator sandbox innovation laboratory and gathered thirty to forty… Smart people, lock them in the room, then slide into the pizza from the bottom of the door until the white paper comes out In terms of technical prospects, the white paper is actually very impressive. These people are very serious [They seem] have a good knowledge of what we are doing in the field of cryptocurrency and blockchain They selected some of the best cryptocurrency features, the most advanced technology, Then they [plan] to improve They synthesized it into something that is impressive from a technical point of view He drew on the theories of Ethereum, such as the virtual machine used to execute smart contracts and Gas Can be added to Merkle state tree of Merkle tree, or Ethereum state tree An embedded digital currency.
Proof-of-aythority algorithm, a joint network of verifiers, Similar to Ripple or EOS, this is a blockchain, but not completely Their consensus algorithm is not new. It is a Byzantine fault-tolerant consensus algorithm, They said it’s not proof of work they want to transfer it to proof of stake There are some very interesting things. They mixed [these components] together… And created something impressive – from a technical point of view It’s impressive, not because of what was actually done, but because of who was doing it If I, as a three-party collaborator, released that thirty-page white paper, everyone would [shrug] "Okay, another blockchain comes out…" But when a company with 2 billion users does this, people understand that it can have a big impact Now we will see if this [idea] survived the first disclosure of Facebook’s company [manager] Currently, this is an incubating project.
This is idealistic. Its vision is quite radical It focuses on decentralization, a little bit now and more in the future Now adopt the access system, in the future without restrictions, now use the authority certificate, and use the stock certificate in the future A very progressive, positive vision However, this vision will directly affect a bunch of MBAs and lawyers at Facebook headquarters "Wow, look at that!" [Laughter] Or maybe not. Let's see It is very interesting to see how much of this vision can be continued in deployment This will determine what happens next.
If he survives the deployment, it may become very successful… And it's a huge money machine MBA will become very exciting Some of the content in the white paper is very surprising. For example, using a three-party cooperation model to isolate it from Facebook… And promise not to use the profile information on your Facebook account Do you have a Facebook account? I don't [They will] use it in cooperation with fiat currency? That's not allowed, right? Currently, its claim is that the information will not be shared and used for surveillance It will not be used for any of these-oh wait a minute. Sorry. "We sent you a very important email…
To notify you about changes to our terms and conditions, please read the following 600 pages of nonsense… Learn how we completely remove your due process and your privacy. I'm very much obliged to you! " "From the Facebook team." [Laughter] So this email I received from the future, it was written by an MBA Once it succeeds, it will change all these promises If you think I’m joking, just look at what happened to Whatsapp The founder of the company had the same idealistic vision from the beginning, He left Facebook, giving up hundreds of millions of dollars in salary and bonuses. "And send a signal." "If you are a dissident, an activist, or a political figure, please do not use Whatsapp," "If the confidentiality of your communications is a matter of life and death If you are one of the millions marching this week, don't use Whatsapp.
" Will something similar happen? I'm a bit cynical. I think big companies tend to… Swallow innovation, destroy subversiveness, and spit out something sterile It is their obligation to shareholders to make profits while exploiting users But we will see. Maybe it won't be like this This is the technical thing that happened this morning Now, everyone is trying to solve this problem, I call it the three-body problem Until now, we have seen this field as an interaction between two major forces: On the one hand, we have the legal currency of the nation-state, just as we mock it in the crypto space; On the other hand, we have people’s currency-open and borderless cryptocurrency for everyone to use These two forces run on orbit and exert pressure on each other Now, cryptocurrency is just a batch of tiny asteroids For example, the fiat currency world is a big planet full of very successful life forms. They look up at the starry sky and want to understand "What's that shiny thing? It looks bigger and bigger." You know, that's the experience of dinosaurs [Someone said], "Don't worry, it's beautiful.
What a beautiful sunset!" "Oh, it keeps getting bigger…" Solve the two-body problem from a political perspective, trying to figure out what will happen in this situation… What happens when nation-states and open cryptocurrencies collide, it’s hard We can’t tell because the laws and policies of different countries are different Some people are frightened and ban it directly. So far, China has banned it about 1,726 times All this is invalid. India has banned it twice Ecuador was one of the first countries to ban it completely.
However, in many developed countries, cryptocurrency… Has actually been booming In what we call a "free society", the banned idea of private currency is constitutionally problematic. The Constitution of the United States and the Constitution of the United Kingdom protect freedom- Wait. Actually you don’t have [Constitution]… [Laughter] We say that the charter protects freedom of speech. And money is a form of political speech This is something that a free society cherishes. It’s not easy to just ban [cryptocurrency] But the atmosphere was very tense this morning. I reluctantly participated in a discussion on Twitter. This is about whether Facebook's Libra is a cryptocurrency.
Let's make a quick vote All those who say it is cryptocurrency, [raise your hand]. All those who say no, [please raise your hand] All those who haven't decided yet, [raise hands]. Yes, ok. I think this question is meaningless This is unreasonable, because Facebook's Libra is new. It is a corporate digital currency Since the Opium War, medieval feudalism and Medici, we have not seen corporate currency How this fits with the rise of neo-feudalism, a major corporate organization The super country called Facebook is launching its own currency Things will become very interesting for many reasons. We are now in a triangular stalemate It is now the currency of the company, the currency of the people and the currency of the government All three will exist. None of them will disappear anytime soon. In fact, more companies will join. The door has opened Facebook is the first of the'FANGs'; the others are showing their fangs, ready to go "FANGs", [represents] Facebook- Amazon-Netflix -Google…
And the billion-dollar technology company in Silicon Valley. And Twitter, Uber and Airbnb The Internet currency era has just begun Silicon Valley is marching into the banking industry in a way that has never happened before So far, bankers have been very comfortable I went to a conference in Zurich and gave a speech in 2014, and I told banking executives "Listen. Don't hire a blockchain consultant to teach you how to solve problems And pretend to use blockchain to do something, you should hire former executives from the music industry. " "Ask them how it felt when the Internet entered their industry" "When did you realize that there was nothing you could do? How did you feel when you started losing to Apple?" guess what? The bank has more than ten years to figure this out, How do they deal with digital currency The music industry should reach an agreement with Napster; but they do the opposite, they fight with teeth and nails, And gave the entire industry to Apple Banks should come to an agreement with Bitcoin, especially when Bitcoin is still the cute gecko of cryptocurrency Facebook is the triceratops of social media, he will disrupt many industries [It sounds like] It’s really weird, but retail banks will be the first to be affected by this.
It’s not the big investment banks who do shady deals to save the dictator, etc. It's a bank that really serves customers Most large investment banks [in the consumer market] no longer accept checks and [saving customers]… This happened four or five years [before] "You guys don't pay enough money, you are not worthy of the bank to serve you" But retail banks, those corner branches where you know bankers, Or at least [you can call them] to discuss your overdraft problem again Those retail banks actually serve customers even those who don’t have bank deposits and don’t have enough deposits They rely on these businesses to gradually expand their influence But they will be hit hard by this new phenomenon, because Facebook not only has 2 billion users, They also know all the user’s preferences and behavior patterns They can use it to reduce the cost of banking and package it into a candy-colored user interface Every time you trade with [Libra], the app allows you to secrete more dopamine It encourages you to do or not to do certain things, like a mouse in a psychology experiment You can’t see the [edge] of the maze because the walls are too high When this happens, it will be very interesting For those of us who have been following, the rise of technological neo-feudalism is frightening Facebook will effectively break regulation in a way that banks cannot do Facebook is targeting central banks Yes, they anchor a basket of currencies to create something stable, However, compared to stablecoins, your local currency is undergoing hyperinflation I said this morning that you are the government of India or Argentina, And you want to implement inflation or devaluation policies, but 10% of your population are switching to Libra They can use their savings on the currency issued by Facebook.
Well, not real hard currency It has no real monetary policy, but they say, but it is more versatile than the Argentine peso It is more common than the Turkish lira, the Indian rupee and more than one hundred currencies around the world Central banks will lose an important power they have as a lever of power over the economy What would they do to ban Facebook? Shut down 10% of the economy? They will try They have been trying to ban Facebook during protests, through dictatorship coups and revolutions But they will fail. Then they will try to regulate Facebook Imagine the poor regulator, in a tweed suit, with almost no salary. Facing the scholars of the Ministry of Economic Affairs, a group of Wall Street lawyers in their small country, The local airport is full of Gulfstream [airplanes] "Let us talk about what we can do with your economy" If you didn’t realize it, Facebook is planning to [launch] consumer and retail SDRs (Special Drawing Rights) Who knows what SDR is? Only a few people know The International Monetary Fund is a global institution that is not controlled by the government [official] It uses contributions from member states A basket of currencies is anchored and the currency issued is called special drawing rights [Special Drawing Rights] is part of the international framework of free floating exchange rates They are the government's lender of last resort.
They operate in a very predatory way They implement extreme austerity policies against governments that fall under their control and divest their industries Their water plants, railways and telecommunications companies Okay, guess what? Facebook will do it now If you think about what Libra is, it is a special drawing rights pseudo currency based on a basket of currencies This is funded by consumer activities. In the past, the national government of these funders would restrict… Loan or try to reduce their activities This is a very serious matter. We have just entered the post-national stage The power to control currency was once the exclusive privilege of the country This has been beheaded by Bitcoin and [this morning]’s Libra The central bank's control of monetary policy ended this morning.
Technology companies… The current market value is US$1 trillion [total] Ability to mint your own money They will fundamentally change their business model and make more money than you think Soon, they will dwarf the GDP of at least a third of the countries on this planet. When the International Monetary Fund called, most governments cringed in fear But they don’t know how bad things will be when Facebook, Google or Apple call Maybe Twitter can even overthrow some governments. It is big enough.
Why not? Soon, Uber will issue orders… Not just to taxi drivers, but to local councils and possibly even the cabinet of ministers We are [approaching] a new world in which three forces will compete: the people’s currency The currency of the country and the currency of the company That is a crossroads. We need to make some very careful choices. I am full of hope because of the following reasons: Whether they want it or not, they will actually contribute to this technology, They will introduce the wrong cryptocurrency to a billion people It's like AOL led people to the wrong Internet. [Applause] This is where the problem gets tricky At this point, we need to decide how to distinguish [based on] our principles I have already talked about the fundamental issues and the principles of blockchain that I care about Sometimes I call them the five pillars of open blockchain, or eight standards.
I didn't count seriously It's between 5 and 8, but you should do it carefully [review] a system that is trying to take over… In your world, trying to take over the basic technology of currency Is it open? What does "open" mean? Open means: can anyone visit and participate without review? Can anyone send a transaction without providing proof of identity? Is that so? We don't know yet. We will see in the future. The white paper [claims] it is [open] We [will wait and see] how this currency actually works Is it borderless? I can tell you now, it won’t be borderless Today, there is only one global, valuable and meaningful cryptocurrency without borders, and only Bitcoin At the point of no borders, it may be as good as the dollar, but Facebook will not enter China I can guarantee that Libra will not circulate in China, they will have their own digital currency, launched by WeChat Or launched by a wholly-owned subsidiary of the People’s Bank of China It’s like Facebook is a subsidiary of the National Security Agency…
[Laughter] It will not be launched in Russia Will they give up their currency? Give monetary sovereignty to a guy in Silicon Valley? It won’t be published elsewhere and people who don’t have a bank account actually need this It will not be borderless. In fact, quite the opposite We have entered the Cold War-style currency war era The iron curtain of currency will fall, we have never seen this before We will see the division between East and West in the evolution of national and corporate currencies Of the three forces, only open cryptocurrencies will spread all over the world [Libra] Impossible to remain neutral Neutrality requires that the agreement must be able to: Anyone, in [anywhere], for any purpose can conduct transactions Many open cryptocurrencies do this. But I very much doubt that Libra will do this If they [allow] to do that, they will receive a subpoena at that moment The most important [detail] in the subpoena is to know where the service was carried out? It's easy They have an office that accepts process services, and this is where the [government] issues subpoenas Do you want to issue a Bitcoin summons? Aha! Can you send to 127.0.0.1 (localhost IP address)? [Laughter] [Applause] We will deal with these issues immediately So it will not be neutral.
It cannot resist censorship Large companies like this are bound by jurisdictional laws and regulations and are obliged to review transactions [As an American] You cannot send transactions to Iranians, Venezuelans or North Koreans Without proper review, you cannot receive [money] from Russians or Chinese The government needs to review who the recipient’s parents are, their date of birth, where they live, and which companies they own This happens every time you try to send a wire transfer [Libra] will not be set in stone.
They said it would be a [immutable] white paper But when you fund some abominable and unforgivable activity Subpoenas will start flying around, and the "immutable" network will soon be muted In the past, you could easily tamper with transaction records without any fees. When you have a consortium, this is easy to do But if a proof-of-work mechanism is adopted, even if 100% of miners collude and try to change history, If you don’t consume the same amount of energy, it’s impossible This means increasing energy costs every day.
In a day or two, this is an excessive burden Even if you can find and force all the miners. They can't falsify history It is not "unwilling" but "cannot". Can't be better than unwilling [But Libra] will not stay the same. It may be auditable and transparent. We don't know the details yet If it is auditable and transparent, it will not be private We may have a huge shocking leak every few years, and all your financial data "belongs to us" History repeats again. [laughter] If it is stored in the blockchain in a transparent manner, you don't have any privacy control- You know, this can distinguish "criminals", but at least they are smart about privacy- All this information will be leaked Now all your trading actions will be seen by friends and family [Each of us] may have a very good friend and we signed an agreement: "If I get hit by a bus, I need you to take my laptop, erase my browsing history, and shred all my bank statements…
[Laughter] Before my mother gets home. [We promise each other]" Financial privacy is a human right. Society is not like a circular prison We have secrets because we are social animals. This gives us the freedom to express our weird nature Our expectations of integration with society are different. At least, I hope we do Because if we don’t do this, what kind of society is it? [We must] fully meet expectations… Meet the expectations of your haughty neighbor? Personality, expression, self is privacy We don't want our financial records to be exposed to the world. But this will happen [if Libra is used] in the next step It may be auditable and transparent, but not private. This is not the blockchain I am interested in More importantly, as I have said many times before, we are standing at a fork in the road On the one hand, we have regulated currencies. On the other hand, we have free, open and private currency Guess what will happen to this new currency? The progress of a cashless society has accelerated There is nothing to celebrate in a cashless society.
They [will] have no freedom or democracy They are fragile, and there is no possibility of exiting the plan or releasing the valve. Every election may be the last You only need to make a mistake once. Just stay at home and say, "I don't care about politics." All weird old people go out to vote for Brexit, or something like that You will ask, "What happened?" In a world without cash, things are even worse The government, company, or payment processing program can determine what "bad things" you do And freeze your future financial capabilities They can prevent you from even buying food, let alone paying rent or [utilities] If you think this will not happen, then what is happening in Hong Kong now is an example China’s Zhima Credit Scoring System is like this If you think that something like this will not happen in your country, then we study European history, [for example] from 1918 to 1945 Charming [ __ ].
We think the UK has learned its lesson But from what I have seen recently, [no]. They tried to repeat it all. Great Sometimes you need to teach a course twice. What will we do in the encrypted space? We will start to distinguish In the next few years, we expect many crypto projects to focus on their principles Now, there is a lot of confusion. We are dealing with an 18-dimensional partial differential equation… A triangle problem Everything is pulling other things, there are six degrees of freedom. It's complicated Who knows what will happen next? Look, Facebook went to India Well, India wants to devalue [rupee]. Indians started using cryptocurrency; others were blocked What will happen next? no one knows! If you are working on an encryption project, you must decide what your principles are I have been expressing the same views and principles for the past seven years.
[applause] The reason is simple: [Switching between different preparation tasks] requires too much preparation Remember, how to follow your own beliefs, how to keep words and actions consistent Some people in our industry have recently noticed this. Inconsistency can happen quickly Recently, some encryption projects are facing such a fork in the road They decided to focus on different principles and tried to change the trajectory of the projects we care about Recently, one of them is about cheap payments, at the expense of distribution and privacy Obviously, for those [participating], privacy is only useful for illegal immigrants and money launderers… They are engaged in shuffled trading and speculative trading Oh, scary! [Laughter] If that is the path you want, when you go down, the light you see is not the end of the tunnel… But an upcoming Facebook train already has the characteristics of an unprincipled, non-privacy market They already have 2 billion users, a lot of funds and technical staff, they will blame you If you don’t make a distinction based on your principles-or worse, you don’t have any principles- The MBA you recently hired is interested in shareholder investment returns, so you make decisions based on this And the best way is to throw away some of these "stupid" and "idealistic" principles, Guess what will happen to that? Once you start to abandon principles, you will [compete with Facebook] What is Facebook, isn't it the most [powerful] unprincipled machine in the world? [laughter] It had no principles at the beginning, and later developed a mechanism to get rid of the principles…
Faster than you think, billions of dollars in marketing stimulate you to secrete dopamine "Don't worry!…As long as we can make a profit, the future will be candy-colored and bright" They can get rid of principles faster than you, use more money, better user interfaces, To get a larger user base than you So, if you reduce the principle because of profit pressure, this is a game you won’t win Facebook will win that game. They beat PayPal and JPMorgan Chase They will definitely win a humble encryption project that says: "We don't need privacy." "We just want to be a fast payment network… Cooperate with law enforcement and [enable] surveillance [capitalism]. " Figure out what your principles are Everyone needs to stop, take a deep breath, and figure out how to distinguish. It's actually very simple If you have a dispute with a person or a company without principles, it’s not unethical. Because they have negative morals [They] are immoral, which means there is no moral guidance. There is no moral compass Morality is not even in their ROI equation Morality is not in the spreadsheet If you plan to fight with them, be different in things they can’t compete Align yourself with a truly open project, borderless, neutral, censorship-resistant, transparent, Auditable, private and immutable I think some of these privacy currencies [compared to their currencies] will be quite attractive People will pay more and more attention to privacy, but Facebook will not Things are really interesting.
As a technical expert, I am very excited I’ve been excited all day and I can’t wait to see how it works This has always been my interest: watching technological systems interact with society… And change the world As these developments progress, I will see if I can find some clues to understand where these things are going. Having this vision has always been my goal in life. As a technologist, I keep jumping up and down As an ordinary person, what I fear is that we are opening the door to a truly terrifying and dystopian future. We are handing over power to some of the most ruthless people and irresponsible companies We are not here to fight the government but in many cases they go hand in hand They will make sure that when we are exploited, there are ruthless politicians on one side On the other hand, in the alliance between the company and the country, we are also used by ruthless businessmen It’s called fascism, but it’s not the fascism that your grandpa experienced. This is a complete new feudal environment that we have never seen before Many people will mistakenly think that if it is not flooded with leather uniform design…
With Hugo Boss, colorful, comic parade, screaming into the megaphone, this is not fascism But today's fascism can be achieved through a flexible user interface, through beautiful colors, supporting browser 24/7 access… And the most convenient location function, whether your phone is turned on or off This is part of your life. It allows you to share photos with grandpa, your grandpa who fought the Nazis This is the biggest irony We need to be very careful what we do next. This is a fatal serious matter The society is not ready because we have never been here before Although I am obsessed with watching, but at the same time, I am deeply troubled I am not afraid because I think Bitcoin will not end. But I’m scared because I believe many people don’t care Many people will have a relaxed, convenient, unconscious, repetitive, seductive, hypnotic rhythm… Through Facebook hypnosis, they will lose their freedom and future. Thank you. [applause]