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Hello everyone, and welcome to another amazing Hatching It Out interview. I'm really excited about this interview. because, you're going to find out why I'm excited. But, recently, if you listen to the show or watch the show, we interview Vinay Gupta, who we've interviewed. You know, I don't know what create time.

Somewhere around eight times. And Vinay, you just someone inspires me to learn more about crypto cryptography, cryptocurrency. Whichever you know you want to add to the in the crypto and, he had this I want to paraphrase this quote because, it's just I am it's kind of conversational. But he said, I have seen further than other men because I've stood on the shoulders of Ian, Greg, Ian, Greg invented everything, right?

Everything. That's all I have to say. And Greg is more important than Satoshi, because Satoshi just figured out how he and Greg figured out why, and that's incredibly important. Nobody knows. He and I keep saying that he's the most important thinker about technology, and that is a paraphrase of around a minute of him. You know, seeing your praises.

Mr.. Grigg, so this is Ian Grigg is a, financial cryptographer. And, Mr.. Grigg. Could you give us more introduction of yourself?

sure. yes. I've been I'm very optimistic about my role, but, the thing we call financial cryptography, it characterizes, bringing together finance with cryptography and discovering that there's a whole bunch of stuff in between to make it work. including things like REITs and software engineering. accounting, governance and and so forth and so on.

So it's a very broad field, and it does need, if you like. My big claim was that we need a team to describe and build things in financial cryptography, which has been a little bit of a, a missing element in the post 2009 crypto phase. so it's a very interesting field because you have to stretch yourself across a whole bunch of different areas, which you it's a bit of a challenge.

I've been in the field since 95. In the 90s, we were building mostly digital cash, except for my company. We were doing the finance side. Somebody else was doing the cash, so we decided to do finance. and since then I've gone through four. Maybe I'm on my fifth iteration of, the process of building out financial systems.

I just want to jump in and ask is for for a person like me, I don't know actually what you mean by the difference between cash and finance. And also when you context things in 95, I was four years old then. maybe you could give a little bit about the history, you know, brief, brief bit about the history about what was going on.

I know David, I saw some publications from him. There's a few other people, with, you know, e cash or e old, DG cash and all the other kind of, iterations of what were primitive digital currency back then. Could you kind of, like, give me a little bit of of a primer?

Yeah. So, digital posh. It came in two brands, two different streams, one of which was, David Jones Blinding Formula, which he'd been working on for a privacy perspective. And he started from the principle that, your dollar note, your fiat currency paper note was private. And therefore, how do we emulate that process in the, the, digital world and the new internet world and the way to do that, he you came up with a way whereby he would take a number and sign it, and that would be delivered from a mint to you, the individual.

Now, if you wanted to spend it to somebody else, they would then have that signed dollar. Note that signed big number. the, the merchant, if you like, would then deposit it back to the mint. The problem with that was, of course, that the mint had already seen the dollar note going out and therefore knew who was spending what to whom.

And his blinding formula was, quite a magic beast, whereby what you could do before you spent the dollar note was to morph it or change it, or blind it by rerunning a certain function on it, and it created a new signature, which was clearly the signature of the mint, but had never been seen by the mint before.

So when it goes off to the merchant, the merchant deposit mint has never seen this before, but they could rely on their own signature. So this allowed, if you like, numbers to become money and to circulate as money. that was one thread which was extremely interesting. Exciting to the cypherpunk element, if you like. The other thread was smartcard money.

this also started in the Netherlands, where they discovered in the late 80s that a lot of their service stations, their petrol stations were being robbed at night. So what they invented was a system where they put the cash into one of these new smartcard inventions, where the smartcard basically was a digital data, but had a little database and, managed to transfer the money from one smartcard to another.

And they gave all of the drivers of trucks these smartcards, and then they installed payment terminals in all the service stations. And that worked out very well because there was now no longer any cash at the petrol stations. the, the robberies disappeared and so forth. And out of that invention came, the general notion of using this smartcard money for all sorts of payments.

And during the 90s, there were lots and lots of experiments with different countries doing different trials and so forth with smartcard money. And, it kind of went on for a while, and then it petered out to some extent. It petered out because it was always seen as a banking business, and the banks weren't particularly interested in it because they didn't want to support cash.

Cash doesn't earn them fees. So for various reasons, the banks didn't really want it unless they were pushed into it. so that was, a big thing in the 90s. so we had these two different threads going on, then after they all folded. Oh, and the reason, did cash with the Zcash product folded was again, because the banks and specifically the central bank managed to impose restrictions that made it uncompetitive.

so after the 90s, in the late 90s, another element came up which was eagled, eagled, basically built a website, very bog standard website, just like you would see with online banking today. and they offered you to send your goal into them and then they would weigh the gold, give you a balance on your gold account on the website.

So initially what they were doing was just taking bags of people's gold. And in America, for example, there are a lot of people who used to collect gold and they would collect it for the apocalypse. That's about to come when they knew that gold would be the only currency. A lot of people also had, bags of silver coins.

with the 90% silver ratio in them, they would send those in and they would be weighed and so forth. So Eagle built up quite a successful business allowing people to get rid of. They got old and eventually to buy Eagle directly. And this, this allowed people then to transfer between these, people in the system. So it was a transfer system as well as a gold escrow system.

and that worked quite well for a while, but it all came to blows, in the early 2000 for a couple of reasons. one of which was that the became a became an adversarial environment, and specifically myself, my company was sued and we ended up in court and had a big battle and so forth. So, the other element that happened was, 911, when 911 happened, one only of the, transfers that had supported the terrorists had gone through a thing called hawala.

what is how wala nobody knew. So they ran around and figured out, oh gosh, there are all these unknown payment mechanisms for remittances sitting around everywhere. These things have been around for thousands of years. basically you have two brothers, if you like, 1 in 1 country, one in the other country, and they talk over the telephone and so you bring your money to remit to one of the brothers, he contacts the the other brother, and they move the money that way.

Episode hosts - Demetrick Fergurson, Corey Petty, Jessie Santiago

In this episode, Corey, Dee and Jessie dive into various facets of financial cryptography, its historical context, and its implications for consent and governance. Guest Ian Grigg provides insights into the evolution of digital finance, emphasizing the role of cryptography in enabling trust and privacy within financial systems.  Overall, the conversation underscores the intricate interplay between cryptography, consent, and governance in shaping the future of financial systems and underscores the need for thoughtful consideration of these issues in the design and implementation of financial technologies.  

<p>Hashing It Out is a highly-technical bi-weekly show that brings you the pioneering developers driving the Cypherpunk movement. In each show we take a deep dive through privacy, sovereignty, and network state technology with some of web3's most influential innovators.</p><section class="footnotes-container">&nbsp;</section>

Hashing It Out is a highly-technical bi-weekly show that brings you the pioneering developers driving the Cypherpunk movement. In each show we take a deep dive through privacy, sovereignty, and network state technology with some of web3's most influential innovators.

Dr. Corey Petty

Jessie Santiago

Demetrick Ferguson

Hashing It Out

<p>In this episode, Corey, Dee and Jessie dive into various facets of financial cryptography, its historical context, and its implications for consent and governance. Guest <a href="https://x.com/iang_fc">Ian Grigg</a> provides insights into the evolution of digital finance, emphasizing the role of cryptography in enabling trust and privacy within financial systems.&nbsp;</p><p>&nbsp;</p><p>Overall, the conversation underscores the intricate interplay between cryptography, consent, and governance in shaping the future of financial systems and underscores the need for thoughtful consideration of these issues in the design and implementation of financial technologies. &nbsp;</p><section class="footnotes-container">&nbsp;</section>

Ian Grigg | Financial Cryptography & Tokenizing Real World Assets

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