Mucca Mucca Mucca i maka is a phrase I
learned here in Osaka and the local
dialect which means hello greeting but
it literally means are you making money
which seems appropriate for Def Con so
Def Con are we making money so many of
you know me is the co-founder of
wireline the p2p application network
tomorrow we have a big demo with our CEO
rich burden don't miss it tomorrow at 12
but this is a story about what happened
when we started looking into using Libra
on our application network so Kryptos
come a long way seems like everybody
wants to be involved in it including
this guy Mark Zuckerberg
now obviously there's a lawsuit coming
so what a sea change for crypto I mean
really it's entered the mainstream and
you know who would have thought from the
days of Bitcoin that we might have a
something that looks like a
cryptocurrency reach perhaps four
billion people and so I think it's a
there's a moment here where everybody
working in crypto should feel some sense
of gratification of the work that we've
been doing the research the open source
finally paying off into something that
can go mainstream so I'm gonna say
something that I think might not go well
with this crowd but I think Libre is
gonna become the de facto currency of
the internet now that might just be
because of the sheer reach of Facebook
and its partners and they're going to be
able to reach between all of the
Association members around four billion
people so anything they do is going to
be relevant but I actually think that
there's a lot to like about Libre
I think the stable coin design is quite
compelling especially for developing
nations so and I'm surprised actually a
lot of people in crypto don't know the
details of this what Libre is doing is
it's creating basically a currency fund
so a basket of currencies where one
Libre gives you Redemption on that
basket of currencies and that's a really
compelling story for people around the
worlds that live in governments that
don't have you know sustainable
financial and fiscal policies and what's
interesting about this again is a
historical moment for a non-governmental
currency that's a blend of other
currencies it's not a new idea
you know IMF STRs and John Maynard
Keynes with bank or we've had this idea
for a long time so this is really
exciting another thing that's going to
come to the mainstream through this
platform is this idea of trust minimized
financial automation so smart contracts
and it could become widely spread
through disassociation so that's the
good part
now everybody here I think knows the
problems with how Facebook is deploying
this so the design of Libra is
effectively of as a it's designed as a
bank as a full Reserve Bank it takes
deposits from end users that goes into a
trust that trust yields interest that
interest gets paid out to the investors
of the bank the Libra Association
members and so in the Libra association
is kind of a misnomer it's not a
not-for-profit thing associations in
Switzerland are basically LLC's they
could have LLC's in the US and what gets
worse about this Bank is that it has a
distinction of having the ethics of uber
the censorship of visa and the privacy
of Facebook these are the people they're
going to be making decisions about this
global bank and everything that we
understand about the Libre Association
so far leads us to believe that
governance decisions are going to be
made only by the investors in the bank
so and this only it starts to get worse
when you start thinking about the scale
of this Bank and it possibly being too
big to fail because it being a being in
a super national jurisdiction you know
in Switzerland and other countries whose
gonna bail out this Bank if it runs into
trouble for example in a regime of
negative interest rates what does this
bank look like so lots of governance
problems there and how are we as a
society trying to solve these governance
problems wrong way with government
solutions now if you feel the same way I
do about government solutions I don't
think that we should hold too much hope
for solving this these issues so I think
there are two outcomes that can happen
from Facebook engaging with governments
on one side Facebook can is going to
engage in regulatory capture and so the
end of that path is the bank too big to
fail and basically Facebook can just go
jurisdiction shopping to find you know a
country that can say
give them give them a regulation that
says well this isn't really a bank
whether it does bank like things and
Libra isn't really an investment it's a
sexual currency so that's the path
they're on now and I think they'll
likely get it the other the other one
which I think oddly we have people in
the crypto community rooting for is that
we managed to corner Facebook the
government somehow miraculously managed
to coordinate and put Facebook into a
corner and then Facebook is gonna do
something lame like venmo or WeChat and
I think that that would be a mistake I
think that's a missed opportunity for
Humanity but it's worse for crypto
because now we're gonna have empowered
regulators that think they know
something about crypto and are gonna
prevent any project like this from
happening again so how could we steer
this to somewhere in the middle or on
another plane you know what how could we
expand this the set of possibilities
here well so I went around and spoke to
some of my friends and crypto some the
leaders of the crypto projects and you
know that one idea kept coming up which
is basically the only tool we have in
blockchain governance and it's hard
Forks basically the state of the art
that we have in governance in crypto
you know generally hard Forks I think of
them as a prank and I think a lot of
people suggested to fork Libre as a
prank
and sometimes these pranks can you can
walk away with with a lot of money I'm
looking at youth hit corn cash there's
but if we you know zoom out the forks
are an important feature of open-source
this is very interesting game theoretic
mechanic where I have to listen to my
community I have to include their some
of their innovations their governance
their use cases lest they fork my code
rebranded and and stop contributing back
to me so soft Forks
so rather Forks create a kind of soft
power between contributors of a network
and of
and of code to the original maintainer
so how can we use this tool that we have
to create a new space for discussion a
new space for innovation and something
that expands for the set of stakeholders
so a few of us got together and look at
these wonderful names here just they're
all stars in crypto these people have
given a lot of blood sweat and tears to
making public good financial platforms
work what did we decide to do well we're
gonna collect all the people that are
excluded from Libre we're gonna fork the
Libre code and fork the community and
create a new network that we call open
Libre
so we've been working on this for four
months and for the trolls out there move
your fingers away from the keyboard now
there is no token sale there is no
equity there's no company behind this
there are no investors so relax this is
all grant funded and funded from
personal money of the contributors so
this is time to thank the interchange
Foundation and the good boys at cosmos
for the generous grant to kick this up
to the next level and many thanks to the
wireline and OS coin teams for the
resources given to get us started so
what we want to do we intend to lock the
door open to libre libre des designed as
a walled garden and I think wall
gardeners don't work generally in in
software but they certainly don't work
in this new era of financial automation
there's trust minimized
I've spoken to Libre Association members
and they have told me when I asked them
directly can my application be stopped
on the facebook network and they said
what we haven't decided that yet it's a
very bad sign
so for anybody that is excluded locked
out forbidden there's going to be an
open and compatible network so these are
the guarantees we need to provide for
that so the three things that we need to
do and this is how we're gonna measure
our success anyone that's impacted by
Libre should participate in its
governance that could be half of the
world's population so half the Earth's
population should participate in
governance and have recourse to fin tech
platforms smart contact platforms are
going to produce a lot of value in the
coming decades and we just let users
share in that value in a meaningful way
three move smart contract language and
smart contracts generally enable new
types of business categories and let's
let businesses innovate with it without
the risk of their app being stopped
so this is our strategy this is how
we're gonna get those three things we
need a type of technical compatibility
and we need a financial compatibility on
open Libre so the technical
compatibility might seem straightforward
but it's not we need to get the move
language which there's a lot to like and
and our team is very excited about it we
think it would be possibly the
compatibility layer for all blockchains
it's that good but the first thing we
need to do is get the movie em to run on
a consensus engine that is
permissionless so if you actually go
into the code the Libre code today the
Libra VIII the Libra consensus is
predicated on all the nodes knowing each
other so that's not gonna work for for
the vision that we have so we need to
make some meaningful changes disassemble
vn the movie in' and Libra consensus and
reassemble it financial compatibility so
technically compatibility is necessary
but not sufficient we need financial
compatibility meaning if a contract gets
moved from Facebook's chain to open
Libra chain it's not sufficient to just
have the contracts work correctly we
need the money to represent the same
thing so the open Libra coin is going to
be a peg to Libra it's not gonna be a
new reserve currency it's going to be
pegged to Libra now this introduces a
number of problems we can't have any
dependencies on the Facebook change
meaning we're not going to be able to do
atomic swaps we can't have a contract on
the Facebook chain that is holding all
of the deposits all the collateral for
the open Libra chain because that could
be cut off at any time second constraint
we have Facebook's Libra will grow to a
size of recent estimates 10 to 20
trillion dollars worth of Libra
circulating on the Facebook network so
hypothetically if open Libra had 1% of
the volume of Libra Facebook's Libra
that would be a hundred or two hundred
billion dollars
worth of open Libre circulated there
isn't enough crypto in the world to
collateralize that in a maker Dow
Construction so we're are we after four
months of working on this so we've had a
bunch of deliverables we've been working
quietly a lot of this is design
architecture and frankly in validation
of designs but today we're actually
really happy to announce something that
we call movement so if you go to github
open Libre you will see the scaffold the
the first designs and scaffold of what
we're calling movement and that is where
we're taking the move virtual machine
and creating all the interfaces for it
to work on top of tender mint a BCI so
what does that mean you'll be able to
run a state machine with the movie em
and the movie smart contract language
and use all that tooling and you're
going to be able to get your State
replicated through permissionless
consensus and use all the wonderful
tools from the cosmos SDK to be able to
create a proof of stake system so go
check that out now and you know many
thanks to now who worked over the
weekend to make this happen for us to
deliver it thank you now but most of the
work going forward and we're actually
most of the work we've done frankly and
going forward is going to be around
governance so everyone working here
we're working on a collective project
which is creating financial
infrastructure as a public good and you
know Bach chains haven't solved the
governance problem in fact hard Forks
seem to be the only thing we have but
there's a superset problem which is
public goods generally speaking our
unsolved problems in economics and
sociology we don't know how to fund make
decisions maintain a public good without
literally having an army behind it so
this is a category of hard problems but
Facebook's decision to do this as a
effectively other company in Switzerland
you know is a mistake they haven't
actually shown and in the intent or or
possibly the intent to understand the
problem or to solve the problem but as
yet openly but we have to do that
so right now we don't claim to have the
answers for governance but we do claim
to understand the problem if you've seen
some of the names up there these are
these are some of the thought leaders in
governance and public goods but
importantly how are we going to get this
done the initial partners the initial
owners of the open libre governance
ardent so today we're happy to announce
as a governing member of open Libre the
Red Cross specifically the Danish Red
Cross a lot of people don't know this
but the Red Cross works on a lot of
financial innovation for the bottom
billion to create resiliency in
communities around the world for example
they have this wonderful project around
community currencies in East Africa the
Red Cross has been around for 160 years
I think and they have this very powerful
model all the time do no harm and
informs all of their decisions so we've
asked them we've invited them to be our
guardrails in our process of formalizing
the governance help us do no harm so
thanks to Adam Bornstein our delegate
from the Red Cross for making this
happen
so I'm gonna wrap up as everybody
recognized this headline anybody this is
the message that was in the first
transaction on the Bitcoin blockchain on
the first block so this is a reminder
that crypto came from some very scary
economic times there was this opaque
convoluted fraudulent over engineered
financial system that nearly brought the
world to go over a cliff I was I
remember that time and so today sorry to
say this to folks in this audience but
it seems like Libra is going to inherit
the legacy of Bitcoin and Libra is going
to inherit the legacy of smart contracts
so as a society are we just doing the
same things over and over with new tools
it doesn't have to be that way so this
is an invitation to come help us steer
the future of Libra and Libra we trust
in facebook we don't if you are a
business excluded by Facebook who would
like to use it and don't see yourself
being able to you should write
eleftherios this is his twitter handle
are your nonprofit and you want to
participate in governance you want to do
this in the right direction that's my
twitter in there and are you
technologists and distributed systems
lots of neat puzzles for you to work on
you should contact now and finally
PayPal call me I'm ready
you