The future will be decentralized | Charles Hoskinson | TEDxBermuda

hi i'm charles hoskinson and i'd like to talk a little bit about the future namely the future given to us by something that can decentralize it so i'm a mathematician and as a mathematician we like to do things like venn diagram everything you know we like to build our models so let's break the world up into two buckets let's look at the banked and documented world and let's look at the unbanked and undocumented world so the green bucket has about four billion people living in it in places like the united states the european union and then we look at places like china we look at places like india and brazil and we start moving into the unbanked and undocumented world places like sudan places like afghanistan well what's the point well the point is if you were to look at every meaningful metric from infant mortality to literacy rates quality of life it tends to get better with the more financial services and the more access the documentation that you tend to have so let's elucidate this a bit with an example let's take a look at two people let's meet jeremy he likes cereal he's about 30 years old and he's born in the united states he has access to a passport driver's license birth certificate he has credentials he went to a university not a very good one but he still has a university he has a good work history he owns a house he's got a car he's probably like somebody everybody knows now let's take a look at his financial history well he has a bank account he's borrowed money before and he had to pay for that house in that car he's he has several insurance policies so if he hits you with his car if his house burns down if he gets sick he has the means to cover that via proxies and he's a very good son he sends money to his mother in indiana every single month so we like jeremy and he's currently engaged in several contracts you can just have them how you will and he buys lots of stuff on amazon and on ebay okay so now let's meet ahmed khan he's a slightly different person he's in the other circle so khan is born in afghanistan he's between 45 to 44 years old we're not entirely sure he doesn't have any formal documentation khan has learned several trades but it's very difficult to understand his work history furthermore he lives on unded land which means that where his house is where he lives he has no documentation that he actually owns that let's say he's lived there for two decades he still doesn't he uses a bicycle for transportation and he has a very difficult to verify criminal history what does it mean for the taliban for example to say you're a criminal so let's take a look at his financial life he lives in a cash economy everything is cash all of his money he takes with him his credit comes from friends and family all of his assets are obviously uninsured he receives money from his brother in india and that cost him 15 cents on the dollar the remittance cost all of his agreements are verbal and he has absolutely no access to the internet this is the reality for about 3 billion people worldwide it's a very tough reality so what are the differences we should focus on what should we learn from this example first jeremy he sends his money at a very low cost it takes only a few days maybe it's a few percentage points on the other hand i'm ed that's 15 so let's look at the numbers for everyone the worldwide remittance business is about 540 billion dollars 192 million people living away from their home countries send money home and that total of money is about 400 billion and the cost of moving that money sits somewhere between 8.6 percent to 12 percent on average it's a world bank estimate but it can be much higher depending upon where you live try sending money to syria for example let's look at jeremy he has low cost access to credit when he gets a loan he can get a long loan five years 10 years 15 years depending upon the asset and the interest rates are fairly decent let's say 5 percent to 10 percent now even if hamid khan had access in a cultural inclination to borrow money if you look at the global micro finance rates they're about 35 percent to 40 percent interest according to a c gap estimate azerbaijan is sitting at the top afghanistan sits at the top and even 35 for south american nations it's just terrible if you look at jeremy he has the ability to objectively bind contracts assets and property like land when he owns a house he owns it he has his deed he has his car he goes to prison for five years he still has assets they're there waiting for him when he comes back on the other hand amen is completely off the grid so let's imagine something let's think about a war breaking out and the land that you live on you have to flee and you come back five years later and there's somebody living on that land who owns it is it yours is it theirs how do you resolve that dispute that's reality that three billion people must live in if you look at the economic cost of this hernando de sotobar is a peruvian economist good friends with bill clinton he actually sat down and calculated that there's about 10 trillion dollars worth of wealth that just locked up due to this lack of documentation this is all wealth that we can unlock we could exploit we could do things with people could actually grow economically but unfortunately they can't and finally this is incredibly important especially to bermuda jeremy can manage his risk via insurance whereas among khan he has very limited tools at his disposal to protect himself from disasters or risk if he gets sick if he dies there's just no one to cover that so these are the problems that he lives these are the problems that billions of people around the world have to deal with on a daily basis so it's very natural to ask how do we solve this what do we do let's propose something well my belief is that this technology this bitcoin thing that everybody seems to be talking about actually has inside of it some solutions and i have my nice little cryptocurrencies there we go cryptocurrency yay okay so i call it the transformative triumvirate big fan of roman history and there's really three things here blockchains decentralized transaction systems and smart contracts what in the world do i mean let's go through them let's talk about blockchains first so basically what a blockchain is is it's just a big database if you're going to store something like who owns what you need that database to be secure you need it to be tamper resistant you need it to be distributed and it turns out that bitcoin actually has probably the best distributed database in the world it solved a very hard computer science problem just to exist and here's the key once you put something in a blockchain like bitcoins it's there forever it can't come out we have every single transaction since bitcoin was invented it's there since january 3rd 2009 so that means it's the perfect place to put identities it's the perfect place to put agreements property rights these kinds of things and it's totally censorship resistant even if it's inconvenient data to a government and convenient data to an individual you can't pull it out once it's there so let's look at some examples of what's already been done so namecoin is a project that wants to replace the entire dns system of the internet you ever wonder why when you go to microsoft.com or google.com how that all gets sorted out who owns what that's icann's dns system it's a centralized solution they're based in america a lot of international participation namecoin is saying let's completely disintermediate everybody it's a totally decentralized grid where we actually have a new dns system block sign actually allows you to take contracts like non-disclosure agreements anything you can think of and actually verify them and sign them using the bitcoin blockchain at an incredibly low cost less than a penny now let's look at the transaction system this is near and dear to my heart i've started two ventures in the bitcoin space both of them were funded in a distributed fashion the second one was ethereum so this brilliant kid named vitalik buterin last year came up with this idea he wrote this white paper he's 19 years old and i read it and i said damn it i have to help them start this because this is brilliant and we decided to have a fundraiser so we published a little address and we said send a transaction and over a course of 42 days 9011 transactions we raised 18 million dollars and the cost to raise that money was only 350 in transaction fees a price of 0.002 percent this is the magic that a young kid who's a college dropouts living up in canada can write a white paper bring a team together on four continents and within just a matter of months have a fundraiser for over 18 million dollars to get his the resources he needed to do something and this is accessible to everyone no one controls it now let's look at smart contracts this is really where the magic actually happens so a contract is basically an agreement having a lawful object entered into voluntarily by two or more parties each of whom intends to create one or more legal obligations between them this is why i'm not a lawyer i don't like reading those things so a smart contract says that's great and all but you still have to have third parties involved in the verification process the facilitation process the enforcement process what if we could algorithmically do this what if we could take a contract and write in some sort of specialized programming language play around with it for a bit and this can actually be done over a decentralized grid and we can have that same immutability and censorship resistance and certainty that we have with our transaction system well it's not a new idea david chom and nick sabo first thought of it back in the 1980s and 1990s and that brilliant kid vitalik buterin and another brilliant kid who works for us competitor ripple actually came up with a way of doing this using bitcoin the ethereum and the codis projects so what does this actually accomplish well you can think of any centralized service that's online like ebay you can think of a dropbox you can think of exchanges and you basically can build a decentralized equivalent you can also think of services like hosting so you have amazon ec2 you have rackspace you pay some money you can use their servers well what is just like folding at home where they full proteins instead of doing that we can actually tokenize hosting of web services and people can just leave their laptops on their desktops on and make a little bit of money and the aggregate grid becomes the world's largest web server combined with the centralized dns system you actually have an entirely new internet and all of this is actually possible because of smart contracts so let's bring this all together let's bring this back to why we care we care about hamid khan so what are his problems again he needs reputation he needs credit he needs to be able to manage his risk he needs low remittance costs and he would love to be able to actually prove he owns the land that he lives on especially if he has to flee it well blockchains enabled him to build a censorship resistant always accessible digital history everything that he does if he does it through a blockchain-based solution it's there forever and it's completely disintermediated from his government so it doesn't matter who's in charge what's going on the particular political whims it's there and i can see that and i can start building things like credit metrics and risk metrics on that okay second just like me his brother can now send things at much less than a penny and if you think of that 540 billion dollar remittance market with 12 going to middlemen it's going less to less than a penny less than one percent it's a beautiful thing and finally because we have these smart contracts we can start talking about building microfinance and micro insurance decentralized networks what does that mean think of kiva think of lending club think of the grameen bank and imagine if they had some sort of frankenstein child but that frankenstein child is completely peer-to-peer anybody can access it they can use it at a low cost and now you anyone can go ahead and click on someone send them a hundred dollars and actually get repaid through that network and have a 90 or 95 repayment that's the beautiful emergent properties of having reputation combined with a money transaction system combined with programmable finance that's what you get for that the same deal for micro insurance you can take a lot of innovation that's been done recently for poor nations and actually have insurance policies that are fifty dollars or a hundred dollars and make them profitable and once you actually have a set of these things you can securitize them so it's a very promising um emerging field so there's one last problem and this is kind of the kicker only 40 of the world's population is online which seems to be a little low but when you think about the age of the internet that's actually quite amazing that something has grown so fast so how do we get internet to ahmed khan well in just the same way that we can build a decentralized lending network in just the same way we can build a decentralized insurance network we can also actually build a decentralized isp so you can actually use technologies like cjdns combined with old hardware like wi-fi routers and cell phones and just a little bit of hacking and finagling and people can become micro isps just like they can mine bitcoin they can now provide internet services to their local community and there are several other solutions to getting it without necessarily having to use the internet proper for example bit pesa based in kenya is trying to find a way to distribute bitcoin solutions across the cell phone which makes sense because they have a digital currency there called m-pesa and finally bitnation is probably the most ambitious they're actually building a global network of ambassadors that are going to provide a full suite of services so it's a very rich field there's a lot of work that needs to be done but one thing i do know is that the future is going to be decentralized just like ted thank you you

Channel: TEDx Talks

Views: 777,914

Rating: 4.924367 out of 5

Keywords: Development/Philanthropy, tedx, tedx talk, Bermuda, Social Justice, ted talks, ted, ted x, TEDxTalks, ted talk, Computer Science, Technology, English, tedx talks

Id: 97ufCT6lQcY

Length: 13min 36sec (816 seconds)

Published: Thu Dec 04 2014

Reddit Comments

[u/AutoModerator]

• GETTING STARTED Start here if you're new to the community.
• CARDANO_ELI5 We have an 'explain like I'm five' subreddit for newbie questions (how to buy, how staking works, fees etc).
  
• PROJECT CATALYST Participate! Create, propose and VOTE on projects to be built on Cardano!
• DAILY THREAD For market/trading, off topic discussions and questions etc.

PSA TO ALL MEMBERS REGARDING SCAMS Please view the following posts:

• There is no such thing as Cardano giveaways!
• Charles' message regarding scams + Pump + Dumps

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/Kaytam]

Love how this man’s always been a visionary and remained focused on his mission. 6 years on, he’s still kicking goals and en route to accomplish many more great things! Charles is our own Steve Jobs in the world of the crypto!! 💛

[u/lifo1989]

from 2014! seems like it is ageing well

[u/Fk_hedgefund]

I watched it again last night for the 3rd time😅

[u/Kruresta88]

Whoever this kid is, he’s definitely going places in the future. Oh wait..

[u/SoundofCreekWater]

I like Charles but could nobody find him a better shirt

[u/Miikehawk]

I like this crypto

[u/haiderusman147]

This footage here will be rare in the future. What a genious person. Great speech.. keep it up.

[u/Boris_TheManskinner]

Hi everybody. This is Charles Hoskinson, broadcasting LIVE from warm, sunny... Bermuda?

​

Can't think of a better ambassador. He has also grown so much as a speaker. He is a big part of why I am so excited about this project.