Adrian Brink : We need financial sovereignty and privacy more than ever!

Transcript

i think they're thank you financial sovereignty and privacy is i think to most of us in this room a relatively abstract problem right to even most it's an abstract problem to most people in western europe and north america

really it's something that we don't constantly have to think about it think about because either we believe it's something that we fundamentally already have or we trust that we have capable institutions which and only those institutions have access to our data and they will protect us and act responsibly or another possibility is and i think this actually falls onto a lot of people that they fundamentally don't think that privacy is something that they need because they don't believe that they've done anything wrong they're not doing anything

wrong right now and they're not planning to do anything wrong in the future and so they just fundamentally don't care but the thing is for most people in the world this really doesn't apply most people aren't as fortunate as us in sort of the westernized world to have very capable and safe financial institutions to have stable governments that they can trust to protect their data their financial information and so on so to probably 80 of the world population financial privacy and sovereignty is a real problem to them and i would even go further and say that we shouldn't personally live in the illusion in a country like france to expect that indefinitely to the

future we are going to have stable and well-capitalized financial institutions that can protect our financial data and that don't have any ulterior motives so i think really even here we should be preparing for the future that currently everyone already lives with coming to why it matters why does actually matter well privacy is fundamentally how we seek to protect ourselves and society against arbitrary and unjustified uses of power by controlling what can be known about us and what can be done to us while protecting us from those who aim

to exert control over our data and ultimately all aspects of our lives really individual privacy is how individuals can defend themselves against overreaching nation states or large multinational companies it's what levels the playing field and what what gives individuals a fighting chance and it is fundamentally what to a large extent enforces that governments are kept in check and i want to take a quick detour here and think a little bit about private messaging for example so i think all of us most of us in this

room are going to have signal installed and if not signal then probably whatsapp and we've come to really expect for example end-to-end encryption because it fits our mental models around how we transmit information to a third party and it fits our intuition in this because when i'm sending a message to my best friend or my mom i fundamentally care about the message not being read the problem is that our intuition for how these things work is somewhat out of touch with reality this was true 500 years ago maybe even 100 years ago but with modern technology the thing that we need to be protecting is not so much the messages it's really

really helpful to have encrypted messaging but what matters more is the metadata because at no point in history did we have adversaries which can at the same time collect metadata from seven billion people aggregate this all into large data sets and run analysis over this but again this doesn't really fit the intuition that humans have about what they care about because no one really cares about well that they've leaked some metadata that they send a text to someone else and i think this is also fundamentally the problem with financial data because in with financial information with financial metadata there is no message to encrypt and due to this we don't really think about the amount of metadata that we're

leaking every time like you tap your visa or mastercard at a payment terminal but it's just like the data you're leaking when you're sending a message to someone else like the metadata is very very similar and the other thing most of us don't consider is how critical our financial data is it is arguably some of the most critical and private and personal information that we have because fundamentally your financial data tells what food you eat what books you buy what movies you watch whether you go to the gym and what medical bills you're paying like revealing your entire financial history reveals everything almost about yourself

and so i would argue that actually this financial metadata is far more important to protect than even messaging metadata or the contents of messages and the last thing here is that privacy is not an individual choice so a lot of people think about privacy for themselves and that if they don't care that they can opt out of requiring privacy but when you think about societies for example even though i personally may not care about privacy i still benefit from a journalist in my country having access to private technology not being surveilled by the government because he can discover corruption corruption in the government

which leads to better policy choices being implemented which even though i fundamentally didn't care about privacy myself i still benefit from it so i think this is very very important to understand for all of us that even though you personally may not directly care about someone reading your text messages or knowing where you've been to dinner you still benefit tremendously by this technology being available for other people in your society to use i'll dive right into the first example around surveillance capitalism and i'm going to be using visa here as an visa is analogous to mastercard american express or

all like paypal wechat venmo you name it so i'm just using mastercard as an example here but it applies to all these newer financial services and really when you think about it what is the best case scenario with visa so visa collects all your financial data what's the best case scenario here well the best case is that they just sell your data to advertisers the best is that you just see a few cute puppy pictures in adverts because you bought dog food then it but what's the worst case really and i'll start with a slightly less than worst case which is at some point visa may very well figure out that it's a much better business model

to know that you have a pawn up subscription and that you're donating to a church group and they're going to start figuring out how much it is worth to you to keep those two things separate right but that's not even the worst part the worst part is once governments start getting involved or even large companies aggregating more and more of this data where they start combining your financial information together with location data gathered from your phones together with surveillance cameras running facial recognition technology outside and even though all our actual messaging was protected due to all this metadata being available in aggregatable we are becoming completely transparent citizens and this is something that i think

very few people think about when they use your visa visa card at a payment terminal just the raw amount of data you're giving away to private companies here the next example i'd like to talk about is nation-state weaponization there used to be a time when i thought that the global financial system was more or less neutral right because it's what my intuition tells me is the right thing that germany should do business with france irresp according to the rules of each local country not according to some third party rules and interesting enough when they built the swift banking system in the 70s

they did think about this they purposefully designed swift to be completely neutral because they realized that a global financial settlement layer requires this neutrality because otherwise it wouldn't gain adoption sadly this is not how history played out and we ended up with the u.s government mostly dominating swift by the use of the us dollar at the moment this doesn't yet have tremendous consequences or i think consequences that most of us in this room can live with it has these weird results where you can't really buy tardigrades using paypal because if you put tardigrade into a memo field on paypal you will get blocked because there's a company called target ltd in malta

which is a specter of terrorism financing so a lot of these current policies may still align with your personal views on the world the problem though is that fundamentally it is a third party imposing restrictions on what two other independent sovereign states can do and just think further right just think what happens in five to ten years what happens if the current u.s government changes we may very well end up in a world where the people that aren't allowed to do business are the people selling contraceptives because maybe the us government swung to the far right and thinks that this is not a

globally acceptable choice and all of a sudden we're in a financial system that can be easily captured and that has been captured by a single entity that enforces their own policies across the globe even that may not be scary enough to you yet think about what happens though if it's not the u.s government doing it if it's all of a sudden china russia and north korea and i think at that point everyone here is going to start becoming very very uncomfortable with this and i honestly have to say that historically this has worked out really really well for us because the u.s used to be very stable but we are moving into a phase in the world where the stability of our governmental

institutions really isn't necessarily a given anymore and so it's up to us to design systems that don't have the same flaws the last example here is d5 and i think everyone in this room should be very very familiar with this and let me start by saying that i think what dfi has managed and what with d5 generally mean what public transparent blockchains have managed to achieve in the last couple of years is fundamentally amazing we have managed to build a financial system that is open that is very very resilient that anyone can join that doesn't have very strange restrictions of who's allowed to participate

that gives everyone in the world the ability to have a savings account um by the virtue of holding a single address but i also think that and actually the other thing about the finance about um public blockchains is that they've been tremendously resilient when you think about it if the nasdaq dropped 50 tomorrow mayhem would break loose right um the banks would need to be rescued everything is starting to collapse people don't have food for some reason even though it's just a stock index that dropped um but in d5 and generally public blockchains this is just another monday i mean this happened like a month ago and everything was fine no one went under we didn't have to bail out anyone

it was great so i think what we've built so far is great in terms of short term individual liberties right when you think about this on the six months time scale when you think about someone that didn't have access to banking infrastructure now has the ability to get a loan that is fully collateralized with some eth and he gets some usd in exchange the problem is what happens here in the long term what happens if generally blockchains and decentralized finance become worldwide adoptive they're the new system and i honestly think that the long term consequences to individual liberty are really really terrifying because what we are fundamentally building at the moment

on public blockchains is every autocrat's wet dream it's like if i was a dictator i'd really want everyone to start using transparent public blockchains as their financial infrastructure because it gives me the ability without requiring that i infiltrate my own financial institutions i start hacking some other financial the ability to view what everyone is doing the data never goes away right like and i think maybe not in this room because we don't have that many americans here but i think a lot of americans are going to wake up to this in like five years once the u.s government starts clarifying how to tax defy stuff that you didn't pay your taxes correctly

um and there's nothing you can ever do once you did once you've used a transparent blockchain this is just what you're stuck with the data is there and don't assume for a second just because no one knows the exact address that you're coming from uh that you are private in any sense of the word they're not here sadly but speak to the folks at chanalysis and you will start figuring out how much they can learn about your financial behavior so what we're currently building is arguably in my opinion worse than the existing financial system because it's a long-term risk

to our financial sovereignty and privacy and i think we are giving autocrats in the future the tools for free because we're just building these as transparent systems and actually just as a little bit of an exercise here and let's see how this goes how many of you would feel very very comfortable opening up your phone right now because i know everyone has e-banking access and just showing your phone to your neighbor and and actually the less hardcore version of this how many of you are willing to show their old ethereum addresses to people and like just like take 15 seconds and figure out who of your neighbors is willing to show you your their financial information and just as a show of hands now um i

assume no one did this but just as a show of hands did anyone see the bank account details of their neighbor anyone okay that is very telling but we have to realize this is what we're currently effectively doing so the scary reality of all of this is building transparent systems is really really easy which is on the one hand the really really good part about them but on the other hand the really really scary part um and it it is the thing so due to this it

will require really a coordinated effort in order to move to more private future because at the moment we all can ignore the long-term consequences and go well the short-term consequences of some yield farming for the next six months are really really fantastic and it's fun i get that but the long-term consequences of building our financial system this way are really really terrifying because what we're currently doing is we're building the tools for the next orwellian surveillance state because instead of just having single governments large powerful governments a handful of entities around the world

have access to most of the financial data which is the current system we instead are saying well let's give everyone the same access which means that all of a sudden you don't have to be worried anymore about um let's say a government a western european government or the u.s government coming after you all of a sudden have to be worried about the north koreans having access to exactly the same data as the u.s government at the moment because we're building public transparent infrastructure here and just as a side note here it is really really difficult and probably impossible to bolt on privacy afterwards like anyone that thinks that

just doing one extra private thing so like you'd send a transaction and your thing becomes private is probably not aware of the full consequences and the full analytical capabilities that adversities are going to have like just adding an extra private transaction is not going to make everything else fully private that you've done until now so really privacy is something that we have to be thinking about when we're building these systems not well now we have this great financial infrastructure that's fully transparent how do we like screw two things on top to make it somewhat private because this is never going to be secure so to me this is fundamentally about building protocols that can curtail

some of these externalities and we are building such a protocol it's called anoma and it's a sovereign asset agnostic proof of state blockchain that allows multi-asset privacy using some very advanced zero-knowledge proofs and comes with a private multivariate multi-variable bartering protocol i can heavily recommend the white paper if this sounded like a lot of words but simply put it allows users to trade and transfer any digital asset with full privacy and gives everyone the ability to discover counterparties with whom to settle one of the simplest examples of what you can do with aunoma is that you can gain privacy for low

volume high value things like nfts because in all the existing privacy solutions so far it's always you have single asset privacy meaning that you get very very good privacy for a single asset but an observer can distinguish whether you transact which asset you're transacting with in our noma in the multi-acid shielder pool all assets share the same privacy set which gives you this tremendous feature that you can use it to make your nfts private because once an asset is in the shielded pool an observer can't distinguish with which acid you're transacting you're just transacting with this opaque multi-acid chill pool and that's it but they don't know which assets you're using within it but i also have to admit that anoma

isn't the it's not a one it's not the one protocol uh the future privacy stack the future financial system is going to look much more multi-layered than this i'm personally a fundamental believer that we're going to see hundreds of l1s actually coexisting and they will all interact with each other and we're slowly going to be building up this financial stack the next financial infrastructure that we can be using but for example things we still need is network level privacy the ability to send tcp packet to someone across the world without revealing about who's sending it or things like open source hardware i mean since you've been traveling if you haven't been following the news the most modern iphones are incredibly

vulnerable and fundamentally this is probably not going to change until we start having open source hardware from the ground up that we can inspect audit and verify so i'd like to leave you with this at no point in history of mankind have centralized entities whether companies or governments had more control over our financial lives than now in reality the a king 500 years ago didn't have nowhere near as much control over this over their citizens and their financial systems than what modern governments have and this sounds fairly depressing i think but

at the same time i've never been more optimistic about the future because we've never been in a better position to do something about this with the combination of distributed systems and cryptography we actually have the tools to build 21st century financial infrastructure that is resilient against both the capture and weaponization by centralized and malicious actors thank you very much thank you very much thank you there will be no questions for this session hello

hey guys if you want to know if you want to ask any questions to adrian you can