DeFi by Design EP#66: Global Reserve Currencies and Smart-Contracts in Politics w Greg Tanaka

Transcript

welcome to d5 by design where we talk all things blockchain and cryptocurrency while striving to educate empower and enrich it's your boy andy and welcome back to the defy slate youtube channel smash the like button on this video that really helps us out and sit back and enjoy the content thank you very much what is going on d5 slate fam welcome back to the d5 by design podcast today with greg tanaka and we are super stoked to be talking to greg uh as a is a public figure um who is running for congress and we'll dig into more about his policy and his uh expectations and and journey along the way um greg

also has a protocol live on the avalanche chain and uh we'll we'll cover uh his experience as a builder in the space as well and and how that crosses over to uh some of the public impacts that he's looking to make in a congressional setting um greg it's uh it's awesome to have you on man thank you rob i really i'm so excited to be on d5 slate really appreciate it super well um yeah let's let's start at the beginning um you know kind of kind of take us through your journey leading to crypto how did you find crypto um and and you know what were your initial impressions um and and we'll we'll kind of go from there yeah sure yeah so rob i um

actually i knew about crypto really early um uh so i i started uh with bitcoin way back when they when they had a faucet i mean it was ten plus years ago now um and um they're literally giving away bitcoin at the time um and i think you know when when it hit um like ten dollars i was so excited i sold everything and looking back on it i just it's like one of the one of the regrets i have in life but um so i i've i've i've been an early uh user of it more of a hobbyist dabbler um and i had no idea it would be as big as it is now and um and so that's kind of my first start was just you know literally

with a bitcoin faucet that was like the first first um kind of real experience with it and then just been more of a hobbyist kind of as time time gone on and um more recently um as the d5 stuff started coming online i started getting really interested in it because when when you have all these different utility tokens all working together as this ecosystem suddenly i think the crypto uh bitcoin ethereum all this becomes actually a lot more useful and you know i know there's a lot of bitcoin maximalists out there um and i understand whether their their point of view but i think the ecosystem is what makes this really strong because pretty much there's a a token for everything right whether

it's buying a house or you need wi-fi access like with um or you needed uh insurance or you need um just about anything you could think of there's a token for it now and i think all this kind of and with all the bridges to everything it's finally become really practical and useful so it's it's exciting times and um and uh yeah so right now working on the mosaic protocol and what it is is it's on the avalanche chain and what it what it does is it uses machine learning to rebalance between different crypto assets and uh we will forecast the price of those assets and then also

what protocol would have the highest yield so we would put them on like snowball or trader joe and we'll move them around every hour depending on what we forecast apy will be so yes really excited times i actually think that crypto has such a big future especially decentralized finance because i see that just about everything that's happening the traditional finance industry is happening in the d5 world only a lot faster a lot more innovation and if you look at the percentage of the economy that the traditional financial financial industry takes it's a huge chunk something like i read something like 10 to 20 percent of the us economy

is uh the financial industry makes about 10 to 20 percent of the of the us economy so i mean this is your visa right taking that three percent off of each cell this is your um you know shaw shaw so i have sean schwab and you know they they charge me you know 25 or so on my credit card and then they give me point two percent interest rates on on my savings account right so this incredible 10x spread uh margin that they get and um you know i think the promise with dfi is that you can greatly reduce the the um load on the us economy right because so much of the of the gdp goes towards these financial

companies you look at what are they doing right they're just basically moving numbers on a spreadsheet so it's i think the promise of d5 is that those margins will get a lot thinner so schwab instead you know 100x margin um you know there'll be something a lot less right so the the people actually doing things actually benefit more and plus i think there's a lot more new financial vehicles out there because of the fact that you have smart contracts you do things you can never really do in the traditional finance industry so i think there's so much innovation and potential available and so i'm very excited i mean this is like a this is truly a new form of money that um will i think trouble charge our economy yeah and and that that's a great segue

into uh some of the policy that is enabled through smart contracts that and that's where i want to kind of uh direct uh our conversation in terms of you know one year your initiative to run for public office we see you know several uh anonymous developers and and a philosophy in the space that kind of is kind of you know get off the grid uh you know uh users choose to interact with these protocols uh kind of hands off they they want to contribute to the to the um the ecosystem but not necessarily capture the recognition that might come from contributing to a project the um

case in point being andre cronen kind of leaving the ecosystem last week you know he's a major developer and he contributed to several different projects i'd say 20 plus protocols he was a core contributor and an elite developer to and um it seemed like uh the the drama and the expectations surrounding his work uh got got to be overwhelming and he chose to leave you know maybe he's going to continue to contribute to the ecosystem through an anonymous profile or maybe he's completely hands off you know either way it's it's an indication of kind of this shadowy

super coder type of uh mentality that underscores a lot of the the cryptocurrency ecosystem um you're kicking a completely different route uh looking to bring cryptocurrency and the innovation of smart contracts more to light in a more public and pronounced way what what was your um motivation what what really pushed you to uh contribute to the ecosystem in this public manner well uh so uh first of all right now i'm currently on the palo alto city council so i'm a elected official here in palo alto california and one of the motivations for me to run for city council

and this was back in 2016 is uh the mayor at the time was trying to ban software development so he made the coverage cover of new york times saying mayor palo alto this is where facebook started google started hp right all these iconic companies started and for me to ban software development was crazy so at the time i was running a sas company software as a service company and i thought that was crazy right how could you ban software development such a fundamental um you know this is kind of like this is what created paul as technology and software's a big part of it so that was my motivation to run for city council and when i won the very first thing i did was i i worked to

legalize software development um and a similar experience happened to me with crypto so you know right now i run a d5 crypto startup and uh basically um you know i'm not sure if you're familiar with the infrastructure bill somewhat um you know just just kind of uh loosely with the implications of some of the broker dealer classifications of crypto and and the requirements of reporting some of these transactions that seem to be overreaching i'm sure you can you can explain a bit further yeah so the infrastructure bill the idea behind it was to help the cu the country recover from coved and also make a bunch of

investments and infrastructure that that the country needs so the big idea was probably okay but the big issue was they snuck in some provisions around crypto which has nothing to do with infrastructure had literally nothing it was just like something inserted in by the treasury department and what this did was it basically required everyone uh to disclose who the counterparty is so let's say you're a d5 developer you develop a solidity contract you're supposed to uh disclose who's using that solidity contract right um and that's literally impossible right you you don't know who the county party is you're just a you're just a guy writing solidity right and yet you know you're and if you don't disclose who the

counterparty is that means if you don't disclose the person's real name the social security number their address which you literally don't have because it's all an anonymous trustless environment you face like you know twenty five thousand dollar fine and or a five-year prison sentence right so it's a felony right if you're a nft artist and you develop art right and um you know you're supposed to you know you and you sell it you're supposed to report who the counterparty is right um you're supposed to issue them 1099s and if you don't again you face prison time right if um you know if you're if you're a miner right you're mining bitcoin or ethereum or whatever right you're helping to validate it you're supposed to you're supposed to also report to

counterparties right and so there's all these situations where it's it's literally impossible to report to counterparty yet the infrastructure bill basically has this requirement um and i understand why the treasury department is trying to do this they're doing this because they want to make sure that everyone's paying their taxes right so to get everyone to disclose all the other counterparties theoretically they could triangulate everything and figure out who's not paying their taxes but the problem and i'm not saying we should not pay our taxes but the problem is is that it's impossible to comply with with how crypto is structured right so basically what happens is this is there's a there's a knife on all of our heads right hanging over our heads um

that you know in any day um you know somebody could pick us up say oh you didn't you didn't file right you didn't you didn't disclose who your counterparts were and all these different transactions and and so i think you know whether i don't really think they're necessarily going to enforce it right because it's going to be really hard to but i think what it allows them to do it allows them to arbitrarily pick anyone they feel like and take them out which i think is scary and um what what this is going to cause is going to cause an energy to go underground so that's not a good situation so one of the first things i want to do is i want to make sure that this is fixed right this crazy provision is fixed because

it's a law that nobody can comply with it doesn't make sense i mean the one thing that people don't understand about crypto is that it's all on blockchain it's in fact it's probably more transparent um you may not know who the person is but you see the transactions i mean you could there was that you know all that money is stolen from um uh i think that couple right that you know something 100 billion dollars that couple started billions of dollars and they were they're able to trace it because it's all in the blockchain right even they try to try laundering the money it's really really hard so um so you know i think a lot of the the rules that apply to the traditional money system where the dollar bill really is

not traceable it's really hard to trace that money is it doesn't make sense in the crypto world because it's automatically traces and it's it's a permanent track record of what happened right that cannot be altered or changed and in some ways it's way more secure than the us dollar right because of that and yet we have these rules which are kind of oriented towards trying to avoid you know tax tax cheats right or trying to make sure the taxis can can get away with not paying taxes but it's it's impractical right and it's a way it's going to stifle the industry so that was my motivation was i think there's so much promise with crypto there's so much promise in terms of increasing our financial efficiency i think this will

really trouble charge our economy through crypto um and um and yet we have these things like the crypt like infrastructure bill which has these crazy crypto anti-crypto provisions and you have members of congress who are just not supportive right so mike the current congressman in my area she's uh she'll be 80 this year you know she voted for this and it's disappointing right it's this point this is silicon valley this is where we're supposed to have a lot of innovation and to have a congress member who doesn't support innovation to me is a total travesty yeah and to introduce a contra very controversial for our demographic you know those who support crypto to introduce um

that that literature into a bill that really has nothing to do with crypto at all nothing to do with crosstalk yeah it was for infrastructure and frankly i i supported you know building some of the infrastructure um not so much the inflationary you know consequences that might come along with that but um the the general scope of of that um infrastructure bill seemed to be supportive and and uh bring the country into into a scenario where it was a little bit more um far it was farther along than you know how how uh far back corona by corona set us uh from an economic point of view and and we're seeing something potentially

similar with the most recent um executive order from from president biden right he he put out this order um which seemed to be you know rather open and receptive to uh regulation um and and cryptocurrency uh inc getting incorporated into some traditional financial mechanisms uh if the executive order mentioned uh central bank digital currencies and the possibility of that in the u.s but after that executive order i started seeing kind of these um these uh i don't want to call them bandwagoners but i guess opportunists where

they you know want to piggyback on this this bill and start to draw conclusions um and i think the one that i saw was elizabeth warren who was looking to trace transactions um and and get you know a much deeper sense of who's sending these transactions and really an invasion of privacy into some of some of these uh transactions as a result of of the uh the bill uh kind of providing a foothold to to gain that information um so we're seeing these opportunities start to start to grasp and piggyback on on already controversial legislation um it

it kind of opens the door to just say like you know it's clear that we need education we need uh these these uh influential congresswoman and and those in office to have a deeper understanding of what is enforceable and and through that what what really should um be part of a a legislature to regulate cryptocurrency and what should be left to maybe a wild west or a more open free sort of decentralized finance um you know what's your take on kind of the most recent executive order and how the overlap between traditional finance and decentralized finance

ends up playing out yeah good question so i think fundamentally at the highest level we need legislation and legislators for the digital age unfortunately a lot of if you look at the average age of members of congress it's i think near the 70s right it's like way older than the retirement retirement age of you know people actually working right so you have to i think that's the first issue is that i'm not sure these people are have a good grasp on technology um and also you know i think that it's hard for them to kind of keep up with what's really going on and having a good understanding about where what's good good policy

yeah i think the executive order in general started uh interrupt real quick they they're almost a bit intimidated by the technology probably as a result of not understanding it and they're meeting this uh potentially innovative innovative technology that could you know really benefit their constituents they're meeting it with resistance um and it's it's closing closing doors it's closing their mind yeah absolutely so um so i i do think that we need a fresh perspective in congress and so i'm hoping that you know there will be new members voted in who have a more open and tech savvy kind of perspective right so that uh the policies that come through makes

sense right they're practical the ones that can actually be implemented the ones that people can actually follow right it's like saying oh you're not allowed to breathe i mean it's like it's kind of a law like that that makes no makes no sense it makes zero sense now with the um recent executive order that was signed um so i think that's actually kind of exciting so it shows some progress you know i think the central bank digital currency is um kind of interesting i mean i can understand why the government wants it because it gives them incredible control and incredible um insight as to who's using what but there's a lot of privacy issues with cbdc's you know for china of course they absolutely want this right they want to build this authoritarian government so

they want to they want to be able to control where the currency is used and you know who's using it and all this kind of stuff and you know you look at like canada right they had the trucker strike and then they they started shutting down everyone's bank account so a cbdc you could do that really easily with the cbdc right so i you know i'm a little bit mixed on the cbdc because i actually believe that there should be a separation of money in state so i don't know if you know but like in when the founding of this country we had the celebration of religion and state which i think was great because a lot of countries the religion was kind of extended with the laws right with the government and so it was you know they had all these kind of arbitrary things

because religion was mixed in and when they separated out religion and state i think things became much much better for everyone you practice whatever religion you wanted and and the government laws weren't biased by some sort of religion but i think the same thing is the case with money so in the past money had to be done by the government because you have to make sure that people weren't counterfeiting it you had to have enforcement of the laws of contracts there was no practical way but today money like one of my investors um from a recent horse mark andreessen has this famous saying that software is in the world and i think software has eaten money so with crypto you don't need to have an army to enforce a contract but yeah a smart contract will be automatically executed

by software right there's no no standing army is needed no court systems needed right you don't need a police officer to enforce you don't need a good service to make sure that people are not counterfeiting so all this kind of government apparatus that you needed for traditional money supply which you need to do when you're just putting you know ink on paper and calling it money right you need it to have all this infrastructure you need to have all this cost and all this energy spent to support the fiat system but with a crypto currency you don't have to it's done in software and so i think that um there's a possibility now to actually have a separation of money in state and i think that's actually really important because um i'm not sure rob have you ever heard of ray dalio

he's i think the ceo of bridgewater so he he talks about these you know the rise and falls of different empires and you know like as you know he kind of shows the chart of like the dutch empire and the british empire and you know all these other empires over the past 500 years and they all follow the same same curve right and what happens is on the downside of the curve um is there's like the government that prints money like crazy and um you know incred like massive inflation and basically the country disintegrates and um you know i i i think

the united states is amazing i think so much innovation has come here i would love for united states not i would like to delay the fall of our empire so to speak i'd like to i'd like for united states to remain number one but uh but right now like you robbie you kind of alluded to it but inflation is at 40 or high right we've i think something i said i saw stat out there that 40 40 of the dollars in circulation right now four out of 10 have been printed over the past year and a half two years right and so like here in california we hit 6.50 cents for the cheapest for regular gasoline 6050 cents right i mean premiums like seven seven dollars already

um and right now uh a gallon of gas uh real gas costs more than uh a transaction of ethereum gas that's right that's right it's like four bucks to get a get a transaction through on mainnet and uh gas is like you said 650 a gallon yeah it's crazy um so i i think we need to prevent the debasement of our currency um i mean this is this is the number one sign that happens when when empires fall right the um rob ray dalio showed this happening with all the prior empires that that rose and felt was it always ends with you know the central government printing money like crazy trying to prop things up you get these acid bubbles going on

and eventually the bubble pops right and it just collapses and i don't want that for our country so in order to do that we need to have sound money we need to make sure that there's not this kind of distortion in our economy because when there's distortions it hurts the productivity of the country right if you think about what money is money is just a way to keep score there's no value in money itself it's just a way to allocate resources and if you have distortions in the money supply what this what happens is the productivity of the economy gets hurt right and the real wealth of the economy is what it produces and so you want you want to have a cell money supply so that so that the signals right and that that will direct what needs to be produced

are clear right are not distorted by inflation and right now we're having inflation that we haven't seen since the 1980s right with record high inflation and so this can cause a lot of distortions and a lot of financial pain and it really hurts the people on the on the lowest part of our social economic ladder because they tend to get most of their compensation cash and most of their savings are in cash right versus the people on the other end of the spectrum they're really rich most of their wealth is not in cash it's in assets right most of their compensation like look at tim cook ceo of apple you know he gets one dollar salary right most of his conversations in stock

and so it's just incredibly regressive tax and it creates this bigger divide between the have and have nots and so it's something which i think we need to have this sound money supply and crypto to me i i think i wish you know the executive order said that uh cryptocurrency could be legal tender that that's what i want right so if i get elected to congress i want cryptocurrency to be legal tender there's no good reason why it shouldn't be um i i think we should also have a capital gains holiday on cryptocurrency so like if you go from bitcoin to east to tether tethered to you know your favorite crypto currency token just you're directly supposed to be paying capital gains tax and all of that

but how the hell do you do that like how do you what is the capital gains tax going from btc to eve i mean come on like how are you supposed to figure that out right um and so i think you know i look at the internet certain in the internet in the early or mid 90s there was no sales tax on e-commerce right in fact there was kind of a holiday on sales tax free for uh e-commerce for the first decade and a half or so and it really allowed the industry to flourish now the reason why the government did it wasn't because they didn't want the tax was because they didn't know how to tax it right it was too hard from the tax versus from traditional you know brick and mortar point of sales type of thing um and so we're kind of the same

situation with bitcoin so i actually believe that we should not have any capital gains tax on cryptocurrency we should allow the two scholars to flourish because if we have sound money supply we'll have a really great economy right the economy is really tanks when you start mucking around with it's like um when i was a kid i used to play monopoly with one of my friends and he he liked to be banker right and he would all slip himself extra money you know and so it was just like and it ruins the whole game right when when when the money supplies is distorted right by people who are cheating and basically what the government is doing by printing money is they're cheating right there it's you know they're basically i saw i saw another stat that i think like 46 i think that the average

hit uh to the family in terms of what inflation has done during coven has been something like 46 47 thousand dollars per i think per capita profound i forgot what it was but the amount of money that the government gave to families and not everyone got it right like if you're if you make too much you didn't get it it was like four thousand dollars so so they stole okay they sent it with inflation and by printing money they basically stole like 10 times more than they gave you right and so it's just it's just craziness right this it's like an illegal tax on on society that's incredibly regressive it creates a bigger bigger gulf between the have and have not right

and so we need to stop this right we need i think this is so and i think it's a tendency of all governments to do this to just print money like crazy when they're trying to keep things propped up and that's what we're trying to do right what we should have done when we're supply constraints we shouldn't be like um you know i i you know i i understand koben we don't want to like a global depression so i understand why we we wanted to create some stimulus but when you're inherently have less supply i can also explain to my kids like what is inflation i said imagine our household had we were producing producing two bananas right and we have ten dollars if something we have twenty dollars it's not like the households getting richer we only have two bananas our our wealth is what we

produce it's not how much dollars there are right and and so what we should have done is stimulate up to the supply chain keep it capacity right because anything more is just inflationary it's not helping right but instead a bunch of people are sitting at home getting paid nothing more is being produced so only that happens because the wealth again is is what's being produced all that happens is we get this crazy inflation right and it's distorting to the economy it's something which is is it's basically eroding that foundation of this of this country and you know right now united states is lucky to be the reserve currency but as we

debase our currency um and for that matter you know look at what we're doing with russia not and you know i think what russia is doing is terrible but you know the sanctions also you can imagine the next country like china they're going to really think really hard do they want to use the us dollar as as a reserve currency right it's and so i think um and this is what happens to the fall of all empires is that uh they lose the reserve currency status global reserve currency and so it's scary because you know i've i've lived in this country you know my my great grandfather came to the country in 1880 right so you know it's um i think the greatest country on earth and the best system but but we are

we are basically eroding the foundation of this country by with what we're doing to the money supply we're using as a weapon which i understand why we do it because we can but it's um it may may cause the sun to set on our on on america right which i don't think is a good thing so i think we need to we need to shore things up uh because we have to think about the next generation as well right yeah like you mentioned uh the 40-year high inflation mark if you didn't get a seven percent raise this year you ended up losing money well i mean more than a seven percent because i mean

i think it's like seven and a half percent but it's but i i think here's a really the weird thing is look how they measure cpi right um the consumer price index you know it changes all the time if you use what they used like back in 1980 it would be way higher right way higher inflation and so some people look at you know the stable coins saying oh wow how does gemini give you know eight percent or how does you know block fly give nine percent or whatever it is right how do they you know and why does wells fargo and schwab give like you know sub 1 i mean the reality is is because generally the savings rate has to be higher than inflation so the fact that you know gemini offers like 0.5 percent higher than rate of

inflation it's not that you know tremendous what's really tremendous is is how the government if you look at the treasury department in the balance sheet they're piling on debt like you can't believe right because you know our big trading partners like china they don't want to buy our debt anymore it's basically like okay i'm getting all this paper but it's not worth anything right so so they stopped accepting it right and and so this is this is causing our country to lose the reserve currency status and it's a great privilege to have this and and what's happening is that um it's basically handing it to china china is going to become the reserve the digital yuan is going to be the reserve currency and then maybe one day we'll

get we'll get the you know if china doesn't like what we're doing they'll shut us off with this with their cbdc right it would go the other way and so that's danger and so i think for us we need to keep we need to have a separation between money and state and the cryptocurrency allows us to be to have a efficient economy and not get threatened one day by someone else's reserve currency right now today we are the reserve currency so we can we don't like russia we can shut them down but um you know as we lose that reserve currency and i'm worried that we're gonna lose in my lifetime which is really not great right and certainly in my kid's lifetime and so and so we should we should get ahead of

this and this is why we should we should really embrace crypto rather than push against it i think what what biden did is because it's gonna border it's a nice baby step in that direction but it's not enough right i mean there's so much more that we need to do we need to allow dallas to be legal entities not just white and wyoming but it should be uh decentralized autonomous organizations those things should be legal entities they're as good as a paper or c corp right why not why not in fact it's probably better than a paper c corp right because it's the contract it's all in software right you'll need a court system to force the contract or the the bylaws of the corporation are baked into software right and so um i mean there's that we should allow the copyrights to ride with nfts right

there's so many different things that we should do to embrace a a you know modern digital economy and this would bolster this would this increase our economic productivity and this would create this will help rise our boat because the only way we help okay there's two ways to help we could take the pie we have and just divide up the into different sites you could redistribute right but the other way to do it is to grow the pie and we grow the pie by making the climbing a lot more efficient because there's that 10 to 20 that the financial industries sucks out of the economy and for doing what moving numbers on the spreadsheet that's all they're really doing like what value are they adding why do they take so much for doing so little right and cryptocurrency you don't have to worry about being

yeah cutting up cutting up the pizza doesn't create more pizza it just creates more slices and the output of the of the economy as a numerator and just printing more money as a denominator is just taking the same output and spreading it amongst more and more dollars inflating the currency which each dollar is now worth uh less as it is it's a lesser denomination of that of that output and and that's what we're seeing is is as you mentioned it the the term is debasement as we inflate the currency and in the in the reality of um the the ecosystem that we have now both traditional and and decentralized

um you know we haven't seen a separation of money and uh and and state and you know kind of building on that foundation on that principle of of separating money and state it's you know what one one inclination is that is that we're kind of um opening the window for the robber right like if we choose to accept um bitcoin and decentralized technology and really bring about a tokenized economy with separation of money in state does that uh remove the reserve currency status of the us dollar you know in more intentionally yeah i think what's going

to happen is that um is that uh you've only printed so much money right because okay we become the reserve currency because um because uh of our position right of our position in the world order but as we lose that right as we have more and more debt i mean as more and more trading partners say we're not about u.s treasury bonds right it's such a bad deal like negative interest rates right why do i want to do this um you know it's it's basic economics right you print more money and your money becomes worth less and less less people can be willing to hold it right and where they can put their money in they're probably put into the yuan right because you know they're ready they're

they're having trade surpluses right and the value you want is actually increasing um or if they're going to go to cryptocurrencies as you know themselves so it's something where i think we cannot i i think especially as we use money as a weapon right because money wasn't intended to be what what my money is supposed to be a way to allocate resources it is a way to allocate the production of inside an economy but we're using it as a way that was never really intended in some ways and by doing that we weaken it and um and not to say that you know this is not good you know we don't want to help what's happening in ukraine because you know we saw what happened world war two with hitler right so i'm not opposed to that per se but it has consequences right and the

consequence is that every little bit we chip away at the dollar's foundation if we lose the reserve currency status right more debt would hold on to our balance sheet the more yeah the more more people don't want to hold are like heck i live here i don't want to buy our treasury bonds it's like such a bad deal right who wants to do that you have to be insane to do that and how do we solve this you know the the problem is clearly inflation and debasement of the currency eventually leading to the the la the losing the reserve currency status of the world kind of like what you pointed to that's how other empires have fallen you know how do we how do we solve this what does it look like uh in a world

with separation of money in state so what i think what happened is we're actually going to see a increase in our economic productivity so as we move to a sound money supply we'll see a productivity increase and so they'll be the pie will grow which is great um what it does mean also is um and i think ray dallow said it really well which is something which we all know as individuals but as a country we don't know is you can't spend more than you make okay it's as simple as that right whenever you spend more than you make um you basically and you and you make up for it by just printing money it's basically inflation right it's a pretty simple solution right and so you know ideally of course we want to do the

infrastructure build a bill and we want to do the buildback better and we want to you know you know send 500 to ukraine and we want to you know we want oh 500 billion dollars actually 100 500 some enormous amount of money you know like there's all these things we want to do but you know as an individual that cannot print your own money but you don't have your own printing press you know that you cannot spend more than you have you just cannot right but that that discipline is not in government right because it's easy to do what my friend did when we played a monopoly and he could take money from the bank he could cheat basically right it's easy for the government to cheat because they control the printing for us but it has long-term consequences maybe short-term is good right so short-term

like politically it's good because everyone seems to be happy like oh here's extra money just print some extra you know just let the printers go a little bit a little bit longer and and and everything's good but long term it it's destroying the foundation of this country that's what it's doing and um it hurts the economic productivity of the country as well because you have these distortions the mon like capitalism and money is amazing because if you look at like china so china in 1980s it was broke right i mean people were starving i remember like people used to adopt babies out of china because they were so poor like it was like you know like mass starvation right and when china moved to a capitalist capitalistic

system for their economy they went from being one of the poorest countries to now they're like they're likely to pass us now in terms of gdp output and same people right the only difference is that capitalism works right i mean there's a lot of faults with capitalism but it works right i mean communism we say we're going to just deliberately divide up the pine to this equals slices among everyone does not work right the the economic human the problem is that communism is not with human nature right why would you want to work so hard you get paid the same as the guy next to you who does nothing right and the answer is you don't right and so the economic productivity is hurt and the nice thing about capitalism is

that it aligns incentives aligns with human nature right and that's why there's more economic productivity and so we've got to focus on economic productivity we've got to focus on not spending more than we have and it's really hard you know i want to pull out the city council and i'm one of the rare people to actually vote against things because politically it's not easy right so i voted like we were building a new police building and um you know we were trying to decide whether we're going to spend money on a fingerprint art right this big fingerprint heart right and i forgot exactly how much it was i think it was like four hundred thousand or five hundred maybe six hundred dollars it was like a lot of money it's like hundreds of thousand dollars for fingerprint art and

you know our city actually is losing money right our palo alto while you know historically has been very wealthy we really took it on chin because a lot of people are working from home they're not coming to our city anymore so our revenue is down a lot so do we really need to be spending spending money on fingerprint art or could we just maybe put up the art from our kids from the local junior high school or elementary school and that is that good enough right do we need to have such fancy artwork for our police station i don't know but nobody else wanted to vote against it except for me and the reason why is because you vote against these people get mad at you so the guy that i you know i voted against him and the the guy who really wanted it

you know you know they said he said he's making his you know it's like super mad at me he's trying to train everything his power to try to get back to me on it right and so people don't like to do it they do make enemies but that's what we need is we need people with backbone right we need people to be able to say well no actually we you know we have a massive revenue drop maybe rather than you know paying for all this money for fingerprint art maybe we should you know try to balance our budget maybe we shouldn't take from reserves maybe we should not cut our police department we cut our police department we have like record crime right now right so maybe we should focus on what you really need it but it's hard as a politician everyone the politicians have have

incentive every incentive to maximize short-term gain to get re-elected and delay the long-term pain right and but it's eventually you have to pay for it though and and so to me um that's one of the big reasons why i'm running is because i'm i i think we should be doing the right thing right not necessarily like i'm not a professional college right you know during the day i'm pretty much a tech entrepreneur in the crypto space right but but i i believe in this country and i want this community to do well and so i you know i i vote not just on what is easy politically right because what's easy politically is to prove every single spending project on earth right that's what's easy politically you make

a lot of friends that way and i i will not do that and so i've made a lot of enemies because because i refuse to do that i mean us as elected leaders we need to make choices that's why we're that's why we're elected we need to make choices as to what's really needed and some of those choices have to be will be unpopular but why are we serving right are we serving just just just for being elected i mean if i look at if i get elected to the house of revenue from congress i'll make a lot less than make now right i mean you don't do it for the money unless you're nancy pelosi right and that's so closely then you can i think she a speaker of how she she's worth half a billion dollars now so she was you know way poorer before

now she's worth you know she's one of the wealthiest people in the country right so listen unless you do a nancy pelosi type thing you know there's really no money in politics so if you're doing this should do it for the right reasons right you should do it to maximize the benefit to society not just what gets you elected and that this is what is this corruption is what bugs the hell out of me right um is that we don't have people with backbone people who just really want the votes not what's right for this country right and what's right for this country is not saying yes to everything right you can't say yes to every single spending bill on earth you simply can't because the way the way you're making up with it is printing money it's debasing the currencies debate is eroding the

foundation of this country and it's making it so that our children you know even in our church even you know people that are alive today is basically eroding away their wealth yeah it's not right yeah yeah nancy pelosi was uh you know clearly one of the top traders this last uh she should open her own hedge fund she is like yeah i mean right yeah so this corruption this corruption is intolerable right it's yeah of course she's she's not right she's not a financial trader she's not um uh a typical portfolio manager but yeah she's if she were to should be one of the top ones in the world because nobody does nobody gets that kind of game yeah evidences her her like you said

corruption and the the leverage uh she employs on on her connections in politically to uh to make financial decisions which i i don't think yet yeah i mean the current congress in my area she's been in country for 30 years 30 years right i don't i don't think we should have people in office so long right i mean it's crazy right because people feel entitled right it doesn't make sense yeah but department's on the voters too the voters have to wake up right they have to ask themselves right am i better off now than it was you know 30 years ago right 30 years ago the country was you know declared number one right now china will likely eclipse us in the next

few years and it's scary right what happened what happened to our leadership yeah and and that is a great uh lead into um actually one of the first topics that we were talking about when we first met at east denver um which was how to get more of the country involved utilizing smart contracts um the the ability that smart contracts have to um scale governance was one of the most impressive uh and seemingly beneficial um innovations that smart contracts brought to the table um in in terms of uh pivoting from a representative democracy

to more of a direct or delegated democracy and um that that like you said you know it it it's about kind of the voters waking up and having to you know first understand through education to to make qualified decisions um and and actually enforce the the voting power that they have to to make changes and impacts in a governance setting um and you know that that to me was one actually i i uh i was with uh the university bitcoin club up at a hackathon in washington dc when it first was

somewhat apparent that there was a functional direct democracy that could be employed through smart contracts if we essentially put the country in the form of a dow right and dow is such an abstract term that to fill that to fill that picture out a bit it looks like you know each each uh decision that's made in congress is voted on by the broad population and and you could say you know the that there's um citizens of the country that aren't educated on on a particular topic to make um an effective decision one way or another to on you know if you give the ability of everyone to vote on every decision it just you're gonna end up getting people that

don't really know what they're talking about and making an impact and that's where you have um a delegated democracy where you can kind of delegate your vote to someone that might be more informed on that topic but ultimately the the ability to open up each uh decision to the broad population of of citizens in in the country is is really only accomplishable through the the innovation of smart contracts you know that that level of scale wasn't available when someone had to go to the local library or box office to cast their vote now everyone has the their phone in their pocket that's their voting machine if you you know tie

you know you call everyone's social security number their their voting token each citizen has their own vote one one citizen one social is one vote and they can either delegate that vote to someone else for a specific decision or they can use that that token to vote themselves then you open up the scale of decision making where you can actually bring bring the the general population's opinions um into the into the fold for a much wider breadth of uh decisions and legislatures that that are are put forth which was seemingly a very uh

beneficial potentially beneficial uh uh use case of smart contracts but also a very big change um compared to how our system works today and i'm curious if uh this is something that you see politicians potentially you know embracing over the course of the next 10 20 50 years or the if this is a bit too radical and you know we we won't really see a decentralized form of of governance um even if it's well contained in in our country's citizens yeah so you know the constitution of the united states was written hundreds of years ago right um at a time when there was no electricity no smartphones no

you know not even a telegraph right and so at the time um you know that was the best you could do right the constitution was probably the best you could do if you were to write a constitution today would you do it the way they have it right they had this electoral college thing going on because you know like this practically how do you get people to vote right you only you and you have people vote in you know vote every two years or four years or whatever and and part of the reason is why is because um technology right it took a while to communicate took a while to to get transportation but if you do today with modern technology would you really sit up this way right i think probably not you probably do it differently right if everyone can vote on their phone

um you would probably you could do a lot more frequent votes you could do a lot more direct votes for sure right and you know it won't have to be as expensive right now right now it's really expensive to hold the hold these elections right they have the integrity of the election um kind of uh solid but with with you know with the fact that everyone has a smartphone now you know would you do it the same way probably not you would probably you probably do a lot more direct democracy versus um delegated democracy or representative democracy um i think the thing that i kind of think is need with cryptocurrencies in general is that i feel like they're almost like supernational right in some ways you know everyone hopes like one day we

have a world where um you know there's uh maybe the the boundaries in the nation's kind of melt away and you know the capital system is used everywhere and you know it's it's um it's kind of uh and i think you know you look at some of the largest corporations out there you look at like google or facebook or some of these companies right they're almost like their own country in some ways but cryptocurrency i think is a way to almost do some of that right where you know the the values is is baked into the software so i mean if we were to think about like if we took the constitution and made it into a dow right into a into its own operating system for the for the u.s economy

it would be tremendous right i mean it would be um you know maybe you don't need a supreme court right because because it's all in software i don't know right um but um but it's an intriguing idea right of like if you destroy a nation today so like let's say one day we colonize mars would would the constitution be on a piece of paper or would it be a piece of software code right i i don't know it might be better it'll be both yeah right it would probably require um some axioms or initial um uh kind of not laws but just general like um uh

statements that that govern the the is it the bill of rights that has about 10 or so just kind of you know general statements that that um indicate okay these are the core values of the country and i take it in in you know governing mars it would be um it would be a similar similar kind of uh start to that constitution and then to end up enforcing those values we get into the software piece where we can encode some of these some of these actions where that that's where it starts to it starts to really uh reflect the um activity of of these values and and it's enforceable through this code in a much

more effective and direct way than just electing people to enforce their interpretation of the laws no i you know it's actually a a working organism that can be amended and and enforced without you know anyone's perspective uh subjective perspective um tweaking or adjusting that that uh initial interpretation yeah do you ever listen to podcast uh climate money no i'll check it out so um it's it's a good podcast they talk about like economics type stuff and um one episode on there they had this um story about

um guessing the weight of a cow okay so they had the weight of this cow and you're supposed to guess how much weight you know if you ask me how much i don't i'm not i'm not on a farm so i have no idea right yeah it's like if you've ever seen the jelly beans you know how many jelly beans are in this jar like yeah yeah so so what's interesting is in this uh thing they had people guess on how much the cow weighs right and then we're talking about modern age we're not talking about like you know in 1800 we never had a cal right and um uh what was interesting was that um the average guest was almost dead on okay and so the thing that i guess my point here is the thing about

representing democracy is that even though each person may not be that smart or may not be that accurate the average actually tends to be not bad right and so um in fact i think and it's been a while since i listened to this podcast but it was interesting because the um the uh uh i think the average was actually more accurate than an expert like someone like a farmer or like a farmer to guests who probably could guess pretty accurately right and so i think that's the beauty of democracy well i think i think democracy has two things that's good one thing is that you get people's buying by people voting to get get their bite buy-in right but the second thing is it's kind of

collective wisdom of of the crowd right so to speak um and um but what happens though is you know with our current system people aren't really incentivized to do what's best for us for society what they've done with their incentives to do is to do what's to get elected right i mean so so rather than like if people were going to guess the weight of cal um it's going to affect whether they stay in office or not they're going to guess very differently than if they were just trying to really guess according to that cal way right you have this distortion right in their decision making and um and you know so it it was it was funny because i was you know i'm running for

congress i've been knocking on doors and winter i knocked on was uh was someone who you know previously supported me from my city council race but they said greg you know you're not you're not a political wheel and dealer right you you know you pretty much um you know i i vote very independently i vote purely based on data like i i'm an engineer right with caltech berkeley right so i'm very much just purely based on what is the evidence show right i don't play the politics damage i don't like if if it's good i'll vote for it if it's bad i'll not forfeit i don't care who came up with the idea i want to own the best ideas to move forward but you know like the person said prince told me that he was they weren't going to vote for me because i didn't play the

political games right i wasn't you know i wasn't the wheel and dealer that could convince people of this thing or that thing but to me that's distortion we really want the way a democracy really works would be if everyone votes in terms of what they truly believed was the best interest of the country because then you get this this kind of planet money gets the cal weight thing right but when people don't right when people are playing games like right now in in congress people are playing games it's like red team versus blue team right and there's all this like i bet you some of the people on the on you know on the blue team think that some of the ideas from the red team are good and vice versa right but because there's this this gamesmanship of like okay who could play more political gamesmanship

people aren't voting logically you have to get this impasse right and so to me it was kind of funny that you know one of my previous supporters told me that oh no i i you know i'm not going to support you but then i don't believe i don't believe you you're a real dealer enough in some ways really what should be happening is they should be voting people in who are not political who are just purely looking at the data and voting based on that not not on what party or what what what you know a quick protocol we have to do you know what back we have to scratch we should be voting things on on the mer purely on the merits right and i wish and this is one reason why i'm running because i wish the people in office would do this right not based on

what gets them elected not based on what favor they have to repay or what favor they want to get but based on really what's the best right and this this is what irks me but it's funny though that people kind of in some ways they want their politician to be more politically influential than other people by you know in some ways compromising the integrity of the decision making and to me that's just it's corruption right it's corruption of the system right we should want every and that's the really nice thing about direct democracy is that you know those no one's doing this to get elected or to be popular or whatever it's just clearly based on the right decision that's the beauty of direct democracy versus you know having elected officials elected officials will sometimes do really screwy decisions that make no real sense but they do it

because they're trying to get a political favor right and to me we should and i think this is something in the early days of the of the country they were debating whether they should be political parties in some way they really shouldn't be right everyone with their democratic republican should be voting on what's best right where they really what they truly believe is best not based on oh i'm on the red team so i can only vote for red or i'm going to blue team you can only vote for blue because then you need to really sub optimal decisions for the country and so um i i hope that you know there will be more people elected who who vote based on truly what they believe is the best right based on the data and evidence on the research that

they've done versus just on oh that senator gave me a favor so i got to pay him back that is such a screwball that's a that's that's why we have like these massive screwball legislations because of this kind of stuff right is because we don't have a breeding what's right yeah it's a breeding ground for corruption it and it it's it's like you're saying it it's i scratch your back you scratch mine all of a sudden we have this network of those who are scratching scratching each other's backs and now you have teams that start to form and scratch each other's backs and you have the red team and the blue team you know they scratch each other's back but they don't they don't scratch cross team because that would that would upset their team

you know why are you scratching that team's back when i'm on your team and and you're not scratching mine um it's it's uh it's inclusive it's um excuse me it's exclusive and it's uh you know it's a closed-off circle of people that are making the majority of the decisions without the majority of the opinions and the information like you're saying the the party system is starting to break apart really it's starting to become more fragmented into an ideological system where people are voting based on their beliefs i gotta say you know i'm i i have ideas you know back and forth but ultimately as a crypto supporter i'm gonna vote for the the uh

initiatives that i have and kind of what impacts me the most um and we've seen crypto kind of as a unification between these parties you know there's there's certainly resistance on either side but there's also support on either side as well um that that kind of does indicate that that um you know there's ideal ideological um uh aspects and and uh points that are out there that are important to people that kind of transcend the the emotional attachment and affiliation that people have uh to their party um that allegiance that blind allegiance you know seems to lead people astray um and and throw it

it seems to um push people in the direction of voting emotionally rather than logically uh which which is generating some of these short-sighted um results and consequences that that are creating lasting um issues i bet you if if the if the planet money did the same experiment guess wave of the cow but but it was like among elected officials where they're jockeying to get reelected um or some sort of political favor you know the the weight of the guy will be way off right you know because because they're not they're not trying to get the white right right right they're they're not optimizing for the right

thing yeah and and these kind of relationships are you know how influences is transmitted you know the the incentive of oh if i vote in this certain direction um you know maybe this person is going to scratch my back in the future that probably isn't going anywhere it's the fact that it's contained to a closed-off circle of people that is condensing the power in this circle and not distributing it evenly across the entire population if we had the same you know incentives that if uh any any ordinary person can get their back scratched um

it does seem like a more fair system well i i just feel like the vote should be purely based on the merits right not based on who you owe a favor to right it should be if our congress people right if our president voted purely based on the merits right not on oh i want to get this through so you are i'm going to vote yes on this thing which i don't like i'm gonna vote yes just because you know but if we really really did where it was based on on purely on what's gonna be best for this country we would have much better loss much better legislation right but because we have this kind of really weird system it's it's it causes

distortions right yeah yeah these laws don't make sense yeah and and the thought experiment of of uh colonizing and governing mars i i think really does uh give us an indication i mean you kind of want to do the same same system that we do here right you probably why do we want to keep a stale system around if there's a better system out there um you know any any day we can start from scratch and uh you know it's always it's always an opportunity to uh instantiate a better system there's there you know each day is a new day you don't have to pick up on the on the poor um negative feedback loop that compounds

over and over of a ineffective system you you know each day we have the opportunity to change uh that system and and uh progress in in a in a more favorable direction um greg it it's been a super great conversation man over yeah i i really appreciate you coming on and you know i'm sure we we could have gone another hour whether it's in tokenized economies and what the world looks like with bitcoin as a reserve currency or cbdc's as reserve currencies um you know private stable coins um in in conjunction with some of these central bank digital currencies and um the the uh you know other other use cases beyond financial of of smart

contracts and distributed ledger technology um you're invited back man you're always welcome on default and really appreciate you coming on today man thank you for your work we appreciate it rob yeah how uh if you have any closing thoughts you know go ahead and share and uh how you know our audience support and and you know kind of reach out if they have questions or or just stay in the loop yeah you know definitely um so um follow me on twitter it's just at great tanaka one word um you know we we need all the support we can get um we have um uh you know being in a company is really hard because incumbent they actually get taxpayer dollar to basically campaign right they can send mailings out to their to their

constituents on the taxpayer dollars so it's really hard to be an incumbent especially when that's been office for 30 years but if you guys want to see more rational legislation if you want to see crypto not not go to jail next year because next year the treasury department is going to be rolling out its uh its provisions on the infrastructure bill which basically makes all of us criminals uh you know please check out my campaign support any way you can of course you can donate um that would be great um if you could volunteer for the campaign you could in the district you could vote for the campaign you can volunteer there's so many different ways to help you simply just retweet what the candidate puts out but um would definitely appreciate everyone's support

oh my and my website just simply great tanaka.org greg tanaka.org great yeah d gens are not criminals vote for greg thank you thank you rob appreciate it okay have a great day