OODA CEO Matt Devost and Raymond Roberts, in a fireside chat on The Future of Money at OODAcon 2022, began with a discussion of origins of their interest in bitcoin, the history of money and the global fiat currency standard as a necessary introduction to a longer discussion of the future of money. Later in the discussion they cover the future of smart contracts, Decentralized Autonomous Organizations (DAOs), Digital Asset Exchanges (DAXs), and Non-fungible Tokens NFTs).  Find the conversation here. 

Ten years ago, resilient cryptocurrencies did not exist, yet today the infrastructure to create them is now available to anyone. The blockchain is often described as having the potential to be more disruptive than the Internet itself and the rules of finance are being rewritten every day. This fireside chat looked at the good, bad, and the ugly of cryptocurrency and blockchain and highlighted issues that will drive the next five years of blockchain. Are we in a period of Creative Destruction and what will emerge in the future?

The Future of Money, Trust, Value Creation and Blockchain Technologies

…the idea that there can be digital objects that exist in cyberspace, and that people can own this.  It is original. This is the only copy…

Matt Devost:  What has surprised you the most about this space over the past five years?

Raymond Roberts: So, the two spaces that I would think about right now is the current acceptance of the fiat system.  I never thought that we would produce so much debt in the world. We are talking about hundreds of trillions of dollars of debt. And then, you know, that is a system that just exists. I would always think that we as human beings would start to demand that  should not be the case. That we would want to say, “Let’s roll that back a little bit. Let’s figure it out…let’s adjust that now on the technology side, on the on the Bitcoin side.” And it’s not just Bitcoin, it’s all crypto, all blockchain. Some of the things that really surprised me was how rapidly the adoption of things like smart contracts came about.

So, when I was kind of working on this back in 2013, part of my thesis was that there were going to be smart contracts. There were going to be digital objects that existed only in a digital construct, and that people would own them. I personally didn’t know how that was going to manifest itself. I didn’t realize how easy, actually, the engineering behind that is. But the idea that there can be digital objects that exist in cyberspace, and that people can own this.  It is original. This is the only copy of it, right? It’s not like a photocopy. It’s not like a pdf where you can share 500 PDFs of someone’s book, but it is one object. You own it. What did surprise me about that was this this craze of NFTs  – where there were like these weird little images of monkeys that were selling for a million dollars.  I didn’t get that.  That was just shocking to me.

“It took five hundred years for the printing press to produce a fiat economy…we have been dealing with it since 2009. And it has been this rapid…folks really need to pay attention to this…  …a number of things are going to happen that are just going to go right past us.”

Devost:  The Bored Ape Yacht Club.

Roberts:  The Bored Ape Yacht Club, right. Yes. And so that just kind of surprised me that it would have become the media fantasy that would exist – and We are not talking about all of the other uses of things like NFTs, smart contracts, the idea of distributed autonomous organizations. That’s brilliant, right? Like an organization that just exists in cyberspace, has no human beings, and it is really just a nexus of contracts that execute based on events that occur. And so, to me, the rapid adoption – how rapidly this is being adopted – has been a surprise.

It took five hundred years for the printing press to produce a fiat economy. We have been handling what Satoshi Nakamoto did. We’ve been dealing with it since 2009. And it has been this rapid. So, folks really need to pay attention to this because I think maybe in the next four or five years, maybe ten years, a number of things are going to happen that are just going to go right past us, and we are just going to go “what happened?”  – because we are not paying attention.

…”people…wanted to find a sense of community amidst all this turmoil that was taking place in that space.”

Devost:  The Bored Ape Yacht Club was fascinating because that was also community driven, right? It was people that wanted to find a sense of community amidst all this turmoil that was taking place in that space. But we saw the value creation elsewhere with, you know, it was the NBA had the top shots where you could basically buy the NFT of a particular play, right?

Roberts:  Yes. 

And just over and over and over.  I’ve joined some of them where I’ve purchased NFTs, and it really is about the community. It’s about getting on the Discord – the economic value seems secondary.

Roberts: Yes.

Devost:  What was interesting is you just had this crazy acceleration based on the perceived value of that community of the value of those NFTs.

Roberts:  So part of the thing that scares me in this space is that there are permission blockchains and there are permissionless blockchains.  And there are far more permissioned blockchains, privately-owned blockchains…

Devost:  …explain what you mean by that….

“What happens if somebody just hits delete and says “I am done with this.” What happens to your object?  So that is where I start to question what is the value?”

Roberts:  So, a permissionless blockchain.  You think about Bitcoin. So Bitcoin is a permissionless blockchain.  Anybody can write to it. Anybody can read it. It is completely distributed. There is no Board of directors, there is no owner of a thing called Bitcoin. Okay? So it is a great first case example of blockchain. Most other blockchains, you think about the 20,000 tokens that came after Bitcoin, most of those blockchains are permissioned. They are regulated and owned by a private entity or an organization or a government. That means they can disappear tomorrow morning. Somebody can change their mind.  Somebody can rewrite the code. Somebody can alter how these tokens are issued, what their value is. Someone out there can do this.

Bitcoin took the element of trust out. It said, “We are not going to trust anybody. What we are going to do is we are going to trust a hundred million ASIC computers, mining and guarding this network, all running a single algorithm that nobody is really going to change.” And when you start looking at permission blockchains  – NFTs – the NFTs are all on permission blockchains. What happens if somebody just hits delete and says “I am done with this.” What happens to your object?  So that is where I start to question what is the value?  I can hold a baseball card in my hands. I can hold that and nobody can take that. Well, I guess somebody could, but nobody can just delete that. But a bored ape?  I just don’t know. I don’t know what happened to it.

“…the advent of Bitcoin means that at some point people are going to be getting services from their government without a human being or a bureaucracy involved. And that is possible. It really is.”

Devost:  Yeah.  With the advancement of the ecosystems so rapidly – and when I say rapidly, I’m talking about just the past three years – there were so many projects that came on board. And we tended to forget that. But then we also, as I alluded to this morning, forgot about how we build security and trust into the system, right? The fact that those NFTs are represented for the most part, typically on/in an Amazon S3 bucket. So if I am going to have value to those NFTs, I need to make sure that I’m actually securing the infrastructure in which that exists – and reviewing the security of smart contracts, or the digital autonomous corporation, or the digital autonomous organization. Where do you see from the perspective of the DAO or DAX kind of the first emergence of value.  What would be some of the most productive things that we autonomize on the blockchain?

Roberts: There are simple things like, I was just thinking about on my drive here this morning, I was on the 267 Toll Road, and that little toll tag – that easy tag – that is kind of like a little DAO. It is a little smart contract, right? It is going to deduct every time I go through, the toll tag deducts. And then I see on my phone, I get a thing that says “We just moved $140 dollars back into this, because apparently, it’s ten bucks. Every time I go through that thing.

Devost: …$7 and seventy cents right now…

Roberts: Yes. It is just crazy.  But that is kind of like a little smart contract, but think about, you know, things like your fridge.   There is this idea that at some point we are going to put milk in our fridge, and then we are going to extract milk from our fridge, and then it’s going to order milk and the milk’s going to show up at your door, right? That is a smart contract – and do I give my fridge money? Do I give my fridge a token? Do I use U.S. dollars? Or can I use a Whole Food token? Can I use an Amazon dollar –  whenever Amazon does it? So there are going to be autonomous organizations that are built.

So a corporation  – somebody really defined this really well, there’s many ways to define a corporation, but one of the great statements is it is a nexus of contract agreements.  That is what a corporation is. You can think of a government the same way, but to think about not having a human being making biased or unbiased or tired or unfed decisions.  Think about courts.  They found that judges issue more severe penalties before lunch. Before lunch. because they’re hungry, they’re tired, and they are hungry.

So if there is a case that has to be heard just before lunch, a judge might issue a harsher sentence. Now what if you had an algorithm that doesn’t get hungry that is able to do that, right? So that is another use case of it.  But the idea that we could maybe remove human beings with their biases and their tiredness and their other thoughts – like “I’d rather be with my family right now” – and let an algorithm manage certain things in a more uniform fashion.  That has a lot of potential. Al Gore is quoted as saying that the advent of Bitcoin means that at some point people are going to be getting services from their government without a human being or a bureaucracy involved. And that is possible. It really is.

“I definitely don’t want to be ruled by an algorithm.”

Devost:  Do you think that rigidity is a value? Or is there still value in having human compassion built into the system?

Roberts:  Oh, there has to be. There has to be. I mean, there is that great example of that very first DAO that went up, it got gamed  – and somebody took out a whole pile of money. Sure.  And what happened is this was a permission system. So what happened is the organization got together and said, “No, we have to roll this back. We were not allowed to do that.” If you just let algorithms do that, they might not have compassion for human beings. So, I think there is always going to have to be human oversight. I definitely don’t want to be ruled by an algorithm. 

Additional Resources

Technology Convergence and Market Disruption: Rapid advancements in technology are changing market dynamics and user expectations. See: Disruptive and Exponential Technologies.

Bitcoin’s Momentum: Bitcoin seems unstoppable due to solid mathematical foundations and widespread societal acceptance. Other cryptocurrencies like Ethereum also gain prominence. The Metaverse’s rise is closely tied to Ethereum’s universal trust layer. See: Guide to Crypto Revolution.