[Music]
yeah all right so I will
um give the graph-based uh approach um
to to Identity but actually uh circles
um didn't um yeah didn't start as a as a
identity uh project with a goal to
create an identity standard but instead
it started or it is a project about
money uh and about creating a fair and
resilient form of money and essentially
it creates this identity graph-based
identity as yeah almost a byproduct um
so therefore I will quickly do the money
part and then uh connect it to the um
decentralized identity part and here
kind of just this quote uh from yeah
Professor Lear kind of just thinking
about what money actually is and
realizing it is um a social construct
and therefore uh it is a choice and it's
not a god-given thing uh and it is
absolutely something that well we can
modify and we can essentially modify it
any way we want and we can have other um
choices so let's quickly do this
exercise and just pretend uh we want to
design money right now um
and reasons for that I mean uh in the
crypto world it's I think it's not
unheard of that the dollar or existing
currencies might fail so just from a
resilience perspective it might be good
uh to have an alternative but but just
again let's let's just pretend okay we
are on an island now we are 100 people
uh we somehow stranded there we don't
have money and kind of we we think well
would be good idea to have money how
would we uh do it so the very first
approach could be to say okay let's just
give everyone um thousand
units um but then uh after a couple of
days a group of other people come uh
comes they also get a th unit but then
they spend that and the next day or the
day after that group uh left so they
kind of just got the money spend it all
H and left so was that really a good um
approach so maybe idea two Let's uh
let's distribute the money instead um
over time um meaning
per person you get one unit uh one unit
of money um over time so let's quickly
look at that uh so here we see the um
the uh uh money growing um growing
linearly um and now let's let's say
after after some years we are on this
island money grows linearly storm hits
uh and
unfortunately 80% of the people die so
therefore uh kind of now you have much
more money per person um in the system
and it goes on and goes on and the money
per person in the system grows and grows
so then uh in consequence um the amount
that is newly issued per person
essentially um uh goes towards zero and
then after some time new people arrive
and they are offered to join the system
but they there are already millions of
of of of units of money in the system um
and now we offer them to join our system
and say yeah you also get one unit uh
per hour but essentially in relation to
the existing money it's it's it's
essentially nothing
so the conclusion might be old money
must somehow uh disappear over time and
that's how we come up with with the
third uh uh idea to say okay there is
constant issuance but there's also
constant reduction what we call um
demage and there you get not going into
details but essentially you get a
constant or you always stabilize the
ratio between new Supply and old Supply
that will always converge towards 7% uh
in this approach and this is kind of
just the balance if you look at one
individual U so it goes constant to
those it approaches those 120,000
roughly um and here theoretically if
after 80 years they die or stop issuing
then that would disappear that money so
conclusion uh supply of circles is
converges to
120,000 okay and one one last thing and
then we finally go to the identity part
uh so one one way to look at it is also
to say there's kind of a tax on money um
and if you hold this magic number of 20
20,000 then your marginal tax rate is
exactly zero because the new issuance
exactly equals out the 7% demage if you
have less than that you have negative
tax so you kind of get more from the
system then you pay into and if your
wealth approaches Infinity then at least
the the tax on money uh uh converges
against those uh 7% because then the new
issuance doesn't matter the issuance per
person doesn't matter just the um the 7%
now finally the identity part um who can
create money in this system um and yeah
who who can be let in and in circles the
radical answer is everyone and that also
means fake accounts so you can create uh
fake accounts and or basically just
anyone can create immediately an account
that can issue circles but they are
distinct so of course you could not say
they issue they I mean if they could all
issue the same circuit then of course
that currency would be completely
destroyed because just anyone could
create but of fake accounts and so
everyone creates their
own distinct version of
circles and now um we form this web of
trust so here person a has 300 a circles
and kind of they are issuing circles at
this rate of one per hour circles person
B issues B circles and now they can
trust each other and trusting each other
means they are willing to exchange their
circles um one to one uh meaning B is is
accepting a circles and is willing to
exchange either accept them or exchange
them against any other Circle they hold
in this case um also B circles so here
let's say a wants to do a a transfer to
C and the important part is C doesn't
need to know a or trust a but as long as
there's a pass between the two then a
can send 100 a circles to B and B
because they are willing to um yeah
exchange a circles for B circles can
forward uh 100 B circles and that's very
important that they forward B circles uh
to C so C is person C is just receiving
B circles so circles from a person they
trust so whether a exists or not is not
relevant to C because from their
perspective they just got paid circles
from a person they trust so whether a is
the is a fake account or not is is is
not um um affecting C and we will see
those those those things uh even in a
larger graph summary three real three
rules of circles that's all what circles
defines issuance one per hour 7% demage
and this um trust system that I just
described now um circles is a system
that was launched in October uh um 2020
and here is how it looked like after uh
a couple of hours so this is how the
trust graph formed after some hours that
was after um a day and that was that's
how the trust graph looked after um uh a
couple of
weeks so we have that amazing trust
graph already with um over 100,000 um
well hopefully mostly people um and here
just just a real world example so then
circles went into a period of of of
trying to to make that form of money
work here is the a basket on a on a
farmers market that sold for 450 um
circles and here is an actual
transaction of on the left side me um
transacting to that um yeah Power direct
this is Farmers Market and because they
didn't know me they didn't trust me but
they trusted those uh entities and there
is essentially this trust pass so that
that that's how how a trust pass or
concretely a circle section looked um uh
in in in in
practice so now
um yeah essentially circles creates as a
byproduct uh a digital identity system
and we would argue that it does that
well because it's not the primary
objective or more so speaking so we are
creating this um web of trust but in
previous approaches let's say pgp um
trusting someone didn't NE necessarily
had an economic meaning in circles it
does have an economic meaning because it
says yeah I'm I'm willing to exchange um
I'm willing to uh accept the circles
from that person that that person's
issues and I'm willing to exchange it
against any Circle I hold and if I do
that too Loosely so let's say a random
telegram uh Channel someone says yeah
can you please trust me and I if I then
do that essentially what it will what
will happen is that I will lose all my
circles because sooner or later Bots
will come and and um and um yeah
generate circles if I trust them then I
end up with their circles that no one
else uh in the network um uh once so
essentially I end up with unspin circles
which is equivalent to I I lose all my
circles so long story short um trust has
economic meaning in circles
um but yeah of course the important part
is uh circus doesn't create an absolute
identity it always creates a relative
identity so relative to that group that
initial set you can say those accounts
are likely human are likely human but my
take would be that I think there are
very very few uh use cases for absolute
identity and in absolutely most cases
you want relative identity but probably
we can discuss that uh also more on the
panel later last part uh we are um
upgrading circles slightly to circles uh
2.0 and adding another layer what we
call groups and from an identity
perspective that would probably
be attestations uh here just one more so
circles is or there is this tradeoff
between resilience and efficiency and I
think circuit in its core version goes
maximal resilience so you have all those
different currencies and the idea is
okay if just we three trust each other
and we we are just connected uh kind of
the rest of the world uh cannot harm us
and regardless what the rest of the
world does we are not affected that's
maximum resilient but not very efficient
to have all those uh so we are
introducing groups which allows you to
pick any um any uh sweet spot you want
on this resiliency um efficiency
trade-off so groups essentially just
allow you to say okay you give some
attestations to some of those personal
circles and kind of bch them together
and create a fungible um circles uh um
for that group so you can have here on
the lowest layer those individual
circles and then you can try to say okay
it's let's do some city city cir or some
some Regional circles you can go higher
Europe and you could go all the way up
here and that could be let's say even
World coin or World ID so where you try
to have this this this largest group
which would be most um which would be
most efficient to just have one group
but I would argue also least
resilient uh so yeah just here uh if you
if you trusted by a group you can turn
your personal circles into a kind of
Vault contract and issue the equivalent
amount um of group circles and you can
even do that so here person B is not
trusted but they
hold Circles of person a uh and as long
as a is member of this group they can
still use that to Mint um that group
currency uh here just um yeah we will uh
expect to have all kind of groups so
just to mention a few things that are
here so we could have a group based on
Zupas and World ID on poops on local
groups manual groups um those those kind
of things
so last thing uh here looking at uh
where is circle so again showed you some
pictures from the October 2020 launch
then we did a bunch of experiments a
small scale trying to make circles work
and balloon and barley um but recently
yeah a couple of weeks ago we released
circuit 2.0 at least the developer
release and for early um yeah 2020 we
are uh sorry 20 next year uh we are
planning the um circuit St o launch and
yeah we are looking for people that are
crazy enough to try to uh use this uh
new form um uh of money and if you want
uh to join us um there is a um yeah
there there is
a sign up list behind this QR code well
thank you thank you Martin