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[00:00:00] Corey Petty: Quick ability to introduce yourself. Welcome back to check it Out. Got another great interview for you with Vinay Gupta. We've, uh, we've interviewed quite a few times over the past years, over the past podcasts that we've called or at least the name of this podcast. But, um, why don't you do the normal thing and give us an introduction as kind of where you came from, what you're doing, and, uh, why you're here.

[00:00:23] Vinay Gupta: Sure. Um, so Vinay Gupta. Uh, I, um, uh, I guess a kind of cryptographic applications developer by trade, among others. Uh, I was part of the Ethereum team at the beginning. Uh, and I now run a company called Mattereum, uh, which is Ethereum infrastructure for handling physical assets and, uh, potential real world assets in general on the Ethereum and maybe other blockchains.

[00:00:50] Corey Petty: Why did you move that direction? That's not where you came from. That's not where you got started with Ethereum. Like why? Why did you choose? Physical assets and material as what were you spending a good portion of your attention in time?

[00:01:02] Vinay Gupta: Mhm. So, um, I mean, for me, the critical thing about all of this stuff, uh, was if you want to really seriously improve how the world works, if you want to get just really get hold of the world, um, digitization is the place to do it. Like, if you wanted to fix the music industry, you'd fix how music got digitized. If you wanted to fix libraries, you would fix how libraries got digitized. So when we look at the problems doing, you know, food, shelter, transportation, you know, the clothing tools, if we look at the kind of chaos of the material world and all of its inefficiency. If we got digitization of the physical world right, we could get absolutely gigantic systemic efficiencies of the kind that we can't currently get, right. Really, really big stuff could happen.

[00:01:55] Corey Petty: What's right? Right. You should get it right. What is right?

[00:01:57] Vinay Gupta: Well, that is exactly that is an excellent question. So, um, and, you know, I don't want to be facetious here when I say right is not wrong. Right. There are ways of doing this which will make the world clearly, tangibly, measurably, much, much worse. And there are ways of doing this which will make the world much, much better. And then there are kind of ways in between where it's a little one and a little of the other. So to me, doing it right is now I have to I have to phrase this carefully because I don't want to step on the landmine. Doing it right is not reducing inequality. Right. I have no problem at all with inequality. Doing it right is increasing the standard of living for the absolutely worst off in the world, to the point where any of us would change places with them and not feel like it was a life destroying tragedy. Oh, right. That is not the same thing as reducing inequality.

[00:02:51] Corey Petty: So lowering the barrier of access.

[00:02:53] Vinay Gupta: Lowering the barrier of access. Um, so the kind of, um, the kind of model of this, right, is if we think about what a decent, sustainable quality of life looks like, it's not that hard and it's not that expensive, you know, 2500 calories a day if it's rice, beans and locally grown vegetables is not a dollar a day. Right. If you've got good supply chains, you've got good market access if everything's working properly. What is it? 50 times a day? Dollar a day. $2, you know, is lavish if you've got good access to markets. Similarly, you think about health care. 90% of health care is preventative medicine and a hundred drugs, which are all generic and cost like $0.20, you know, for a treatment. This stuff is all very, very, very cheap. But what we don't have is a way of doing global resource allocation and global resource distribution in a way that will successfully deliver these things to people who need them. Right. Stuff is just kind of borked. We've got unbelievable global abundance, but we don't seem to be able to let poor people buy stuff at anything like the real price. So if we think about this as just like we want the best possible supply chains to run to the poorest people on earth so they can buy the things they need, absolutely.

[00:04:17] Vinay Gupta: The lowest possible prices that would get you very, very close to where we want to be in terms of improving quality of life for the poorest people. Right. It's not about wealth redistribution. It's about making sure that everybody has access to the market in an optimal way. That will solve two thirds of the global problems with poverty, maybe more. And then you sort of take what's left after that process and say, okay, do we need to do some redistribution? Do we need to do this? Do we need to do that? Those are kind of separate questions, right. But the first step is market access. And market access is a tech problem. Most of the time getting people efficient access to markets is a problem of technology. They just don't have the stuff that they need to get access to the markets, that have the things that they need to survive and to thrive. Right. This is not just about keeping people alive. It's about making sure that everybody shares the benefits of the high tech industrial civilization that we're lucky enough to enjoy.

[00:05:13] Dee: And what about, like, the people that don't necessarily want access to the markets? Like maybe they're living a life that's so, um, I don't know, just relaxed and, uh, you know, they're just real well connected. And they have what they need. They don't need access to the market or the field that they don't need it.

[00:05:33] Vinay Gupta: Um, so the, the kind of archetype of this is the self-sufficient villagers. You know, your goat farmers and vegetable growers and some, you know, rural corner of India. You know, the nearest road is a 40 kilometer walk. And, you know, your folks have been there for 6 or 8000 years, right? So it's great up until your kid gets an infection. And then you kind of need some antibiotics, and the antibiotics cost you $0.65, and then your kid goes from being dead to alive. Uh. It's one thing to talk about treating infections. It's a whole other thing. When you start talking about vaccinations, you know your kid gets a tetanus shot. Your kid doesn't die of freaking lockjaw costs since MMR, right? Most of the folks in your village, they get MMR vaccinations if you don't do that. Mumps, measles, rip through rubella. Your you know, all kinds of problems come from these diseases. We've eradicated them here because people have access to the market for that stuff. Everybody needs those vaccinations. Everybody needs the antibiotics because the alternative is you watch your kids die and nobody wants to do that.

[00:06:46] Corey Petty: I got a I have a disconnect here. Access to digital markets. Is one thing that is a tech problem, but you're talking about markets of physical assets. How do you connect those two things?

[00:06:57] Vinay Gupta: Ah, that's what I do for a living, right?

[00:06:59] Corey Petty: I mean, what is that connection and how do you keep that private. If you if you lower the barrier of the entry to the market, how do you ensure that that same market of physical assets is still low?

[00:07:09] Vinay Gupta: Okay. So let's talk about this in kind of a macro strategy sense. Right. Digitization overwhelmingly makes markets efficient and overwhelmingly makes markets brutally centralized. So if we think about the music, um, you know, the music is the thing which has been most effectively digitized and with the most horrible results. Right? That is an example of doing it wrong because we digitized music customers consumers have access to. Was it 60 million tracks for $10 a month now from any one of half a dozen vendors? Um, but artists find it almost impossible to get paid to make new music. So in the process of digitizing music, we manage to basically kill the people that make it. And all the wealth was captured by the people that distribute it who can't sing a freaking note. And that is a tragic outcome. You know, I mean, probably half of my company are musicians, and there are people that would have been professional musicians if the music markets worked in the 20 tens and the same way they had in the 1990s maturity and probably wouldn't exist because literally half of the company are musicians. You know, we've got two choristers that would spend most of their time singing choral music. Uh, my managing director, Anton, uh, is, uh, a member of a band that, you know, played live gigs of the kind that you're recording deals in the 1990s very, very casually.

[00:08:36] Vinay Gupta: Um, uh, Andrew, the guy who did my beautiful staging, uh, is a folk musician and, you know, basically just kind of does the video and a bunch of stuff for materiam, um, and, you know, like, how does he monetize that set of skills? He's a fantastic musician. But turning being a fantastic musician into actually making a living as a musician, the way that we digitize the markets, destroy the markets. And that if we repeat that for physical goods, there are. Imagine what happens if digitizing the housing market turns out to be the Blackrock owns 80% of the property in America, and then they basically just set prices for it. So we have to fight against the centralizing power that comes with digitization and markets, or we're going to wind up with centralized markets for physical goods. And you say that could never happen. How many of the things that you own came from Amazon? Like as a percentage if we just go in your house. I mean, for me, it's probably 50% from Amazon, 20% or 30% from eBay. I don't think I've bought anything substantial by walking into a shop and paying cash. You know, well, you've even used a credit card. I don't think I've done like over the counter retail for anything of substance more than 2 or 3 times a year.

[00:09:58] Vinay Gupta: So about micro center, right? You know, we're on the way towards a centralization of access to physical resources. And if that happens, you're going to get the same kind of crappy results that you got with music. So to me, the decentralization quest goes back far beyond beyond blockchain. You know, I was a decentralization fundamentalist in 2004, 2003. You know, I mean, we were talking about decentralization of manufacturing. We were talking about permaculture. We were talking about decentralization of energy grids. You know, um, uh, why you should put solar panels on the roof of every building rather than just having enormous solar factories, all of those kinds of things. Um, you know, there is an entire decentralization movement agenda and platform way before crypto. And the peer to peer foundation, the thing run by Michel Bauwens, where the, um, initial bitcoin, uh, discussions were held, peer to peer foundation was not about software. Peer to peer foundation was about manufacturing. It was about culture. Software was a kind of minor aside for the peer to peer foundation. A vault was where Satoshi published the Bitcoin white paper. Remember correctly, it's certainly where a lot of the discussions were. I think it's where the paper was published.

[00:11:21] Dee: So I think we're still kind of flirting with Corey's question, like, what is right then you? I mean, I have been a Spotify fan for a long time, and as an end user, it's like, oh, musicians are starving. I my music is great. The bass hits nice. Like, I just don't like. No, it's it's obviously been said to me time and time again and I even have musicians in the family. Um, and they're like, yes, I am starving. And I'm like, man, I am not. This music is great. So how do you how do you reconnect, I guess, how do you fix that? How do you digitize it correctly? Like, I think we're still kind of on the same question.

[00:12:04] Vinay Gupta: Oh, absolutely. Um, and if you think it's bad for Spotify, let's talk about the working conditions for the people who made our phones. Right? I mean, if you think the musicians are starving, wait until you see the people working in the assembly factories, right? You know, I mean, it's a very dangerous thing, right? If we start picking away at this question, what you're going to realize is that the world is not that different from the way that it was in, say, 1820. Right. The slavery has moved around, but it has not ended. And if we pull that particular plaster off, you're going to have a hard time with this, right? Because the simple fact of the slavery didn't stop. It just moved around. And then we can take the kind of, you know, I'm an Indian, right? Post-colonial theory. We practically get fed that stuff when we're in primary school. Ah, well, there was this guy called Gandhi. And let me tell you. Right. So if we take the kind of Gandhian political analysis of modern capitalism literally, you just take the bark off the box, you turn it upside down and you shake it, and the whole of our society collapses. Right. And I used to do that a lot for people. I would just sit down and say like, well, so let's just talk about the supply chain. What is it that compels the factory workers in China to make your iPhone for so little money? Uh, well. Socialism, communism, capital. Oh, wait, this is all class war, isn't it? Yeah, that's right, it's class war.

[00:13:38] Vinay Gupta: But the classes are now divided in different countries. Here's your industrial proletariat. That's called China. Right here are the people that are the agricultural proletariat. That's Africa and South America. Oh, so, you know, in Marx's era, because we didn't have global logistics, um, the classes tended to be co-located in the same society. Right. The Russian Revolution was angry peasants with sickles marching into town to behead their landlords. More or less. Um, so once you get container logistics, the classes begin to stratify, right? The bourgeois, that's your Americans and some of your Europeans. And it's a few of the big cities in India and China, the industrial proletariat, that's mostly China. Um, other places do a lot of manufacturing. But by far the majority of the people you'd think of as industrial proletariat are in a handful of countries. Uh, and then you have the agricultural workers and the lumpenproletariat and all the rest of this kind of stuff who are largely in the resource extraction countries, which are the places where they still have kind of plantation labor. Right. Nothing changed. All that happened was our cultures became the concentrated bourgeois class. And those were the winners of World War two, who simply took all the good stuff in the world and concentrated in their countries, and everybody else just got shoved to the wall because as capitalism fused with colonialism, what you got was a stable world system ruled by finance and bombs, and that's what we're trapped in. Right in any direction. If you start really asking hard political questions about why are things the way they are? All that it boils down to is why can't people who are a factor of things get charged an appropriate price for their labor? If I'm manufacturing an iPhone, why do I live in a dorm of, you know, whatever it is, 14 people in bunks and work, you know, nine, nine, six hours, rather than having a standard of living closer to the people that designed the iPhone or the people that use the iPhone.

[00:15:40] Vinay Gupta: What is it that prevents me negotiating a fair price for my labor? And what you see then, is the structural oppressions on which capitalism runs. Why can't I not charge a fair price for my work? I'm an artist, I sing, why can't I charge a fair price for my music? Well, the answer is the machinery stops me doing that. If I try and charge a fair price, I get no money at all, I starve, I boom, there's the end of my music. So, you know, the world that we're in is embedded so deep in this mess that if you start asking these kinds of questions, the thing literally just comes apart and you just see, you know, you go from feeling like a consumer where everything is great to understanding that you're a consumer in one part of your life and a producer in the other part of your life, and in the part of your life where you produce, you are oppressed. And in the part of your life where you consume your privilege.

[00:16:32] Vinay Gupta: And the amount of money you have dictates how much time you spend feeling like a producer, and how good or bad your producer experience is, and then how much time you spend as a consumer, and how good or bad your consumption experiences. But all of this stuff, your political rights are mediated by money. One of the things I have up my sleeve is there's an international definition for an internally displaced person. It's somebody that's a refugee inside of their own societies. And I am seriously talking about putting together a plan in a few years to try and file an international court case to reclassify homeless people in first world countries as IDPs that have been basically driven out of their homes by a political system. This stuff is hardcore. And would you like to hear the punchline on this awful story? Right. Both sides of my family were victims of colonialism, right? The Indian side got invaded. The Scottish side got shoved off their land. Right? The Indian side. They were middle class. They did just fine. The English were just another bunch of people charging taxes, and they were actually pretty well organized compared to the previous rulers. The Indian side of my family has no ill will towards English colonialism at all. The Scottish side of my family, on the other hand, still tell stories about the farms that they were driven off at the point of a sword in Ayrshire, leading to 200 years of alcoholism and poverty. And they only really began to pull it back together again after they went into the military in World War One.

[00:18:05] Vinay Gupta: Right. You know, this stuff is not about I mean, you know, yes, there are aspects of this stuff which are about race, but boy howdy, the Irish look pretty white to me. And man, the stuff that was done to the Irish makes the stuff that was done in India look like a cakewalk. 700 years of horrendous stuff done to people that we now think of as white. Because in those days it was Protestant versus Catholic, and everybody was white, including the victims of colonialism. So that whole structure, um. You know, what I came up with was a strategy for gently improving the situation without requiring revolution. I think that we can improve the situation incrementally and stepwise, taking advantage of the flux created by the adoption of new technology. And if we are smart and strategic at the point where the markets become very, very, very fast changing at the moment where digital transformation is happening, we can get in there with things that reduce or maybe even solve the political problems that we're stuck in, because the producers and the consumers are both trapped, right? We can resolve the problems that we're stuck in at the moment of transformation. So as things transform, you get in there and you solve the problem with good, you know, correct application of political theory so that you wind up with a solution where Spotify triples the number of professional artists. And, you know, it makes it really easy on ramp. Oh, yeah, I'm on Spotify.

[00:19:40] Vinay Gupta: You know, I mean, if Spotify worked like Patreon, Spotify would be launching artists careers right, left and center. The fact that Patreon is over here in one thing and Spotify is over here on the other. Spotify is leaving money on the table by not creating a launch ramp for artists to build fan bases and monetize their support, and then turn this into like, huge careers. Spotify could have decided that what was important was getting artists paid, and it could have been an enormous machine for getting artists paid, and it would have been three times as profitable as Spotify currently is. Right. It was just they didn't understand what they were doing politically. And then they themselves got trapped in the system. So as we get to the digitization of physical things, the adoption of artificial intelligence, the global adoption of the blockchain as the operating system for global finance, which is officially happening now, you know, that Larry Fink announcement for, you know, two weeks, three weeks ago, that is the end of the question about whether the world is going to use the blockchain for everything it's on. Now, the question is, is that happens? Do we get a liberating technology or do we get an oppressive technology? And I intend to do everything within my power, which is not inconsiderable, to make sure that we get technological liberation rather than a technology of oppression. And this shit really keeps me up at night, right? You know, this is the hardest job in the world if you understand what you're doing.

[00:21:03] Corey Petty: There's your answer, Jesse. Yeah, yeah.

[00:21:07] Jessie Broke: Usually I ask a question. Is what you do actually hard or difficult and, you know.

[00:21:15] Vinay Gupta: It's hard because it matters, right? I mean, if we screw this up, what you're going to wind up with is a barcode on every single thing on Earth, going into a single centralized database that is owned by the CIA.

[00:21:25] Corey Petty: Well, you've mentioned like the story you just told is introducing new markets through alternative like parallel technology or parallel infrastructure, if you will, and the reasoning behind the stratification of the globe and the difference between producers and consumers is the infrastructure that exists that kind of keeps them there.

[00:21:47] Corey Petty: How do you is this an attempt to give the people who need options, more options, and then they use those infrastructure more in a manner that, uh, like I also said, in the past, Bitcoin wasn't taken over, uh, because it wasn't taken seriously until it was too, too difficult to take over. Yeah. How do you make sure it's not taken seriously enough for long enough?

[00:22:12] Vinay Gupta: I have a different strategy. Right? So, you know, I am I mean, you know, increasingly seen as deadly serious people. And that's really appropriate, right? I mean, there was a point in my career where I was arguably the world's best planner for cleaning up the mess after nuclear terrorism or very high fatality, pandemic flus or biological warfare events. You know, like I wrote papers. And what happens if 2 billion people die in two years because of bird flu? And they were good, right? So, yeah, I used to literally. This is no joke. I used to carry a business card that listed all the things I worked on your failed states, civil wars, blah, blah, blah, blah, blah, you know, nuclear terrorism. And then at the bottom it said, but I also do children's parties. And everybody was like. And it was actually true. There was a point in my career where I worked in a kind of like traveling science road show, was the guy that did the liquid nitrogen nitrogen demos. Technically, that was a children's party. Um, and then the next business card just said, I don't get out of bed for less than 1% mortality. Mhm. Right. Um, you know, I'm working, I have, you know, a 30 year plan that I'm working on to try and figure out how we fix climate refugees. They're talking about a billion people are going to be displaced by climate change. Where are we going to put them? I've been working on that problem for 20 years.

[00:23:30] Vinay Gupta: I knew it was going to take 30 years to get to a solution. So I built my life to support a 30 year project that is almost never paid work, because nobody really takes that problem seriously and says, I have to solve that problem. Well, I do, right? Um, so in margin with that mindset, what do I see in the blockchain that makes it worth me spending six years talking to lawyers? Right. And the answer is, if we get this right, you take the artificial intelligence, you take the trustworthy information about the real world that is on the chain. You apply these things to each other, and you get AI optimization of the deployment of our physical resources. And that could be a system that is, I don't know, two orders of magnitude more efficient than capitalism. We could replace markets, setting prices for things with AIS doing deployment of resources, and it could literally multiply the efficiency of the global economy by a factor of 100. Right. And that solves most of our environmental problems. It solves most of our social justice problems. It solves most of our colonial problems. And what does that look like in practice? You get up in the morning and everything that you need for your day is in your house, and then you go bed at night, and then you get up the next morning and some of that stuff is gone and other stuff is there.

[00:24:52] Vinay Gupta: And all that stuff comes from somewhere and goes to somewhere, and you never have to think about it. But your resource footprint goes down by a factor of ten immediately. And then the manufacturing for all that stuff supervene super efficient. Not a single thing is made which isn't already sold. Carefully managed pools of property. In winter, all the bicycles leave Scandinavia and in summer they come back again. Right. Super efficient markets with artificial intelligence to handle the transaction costs could stretch our existing material resource base so far. Right. And, you know, I mean, let me give you a dumb example, right. I have a desk covered in USB chargers. Right. There are just a bunch of these things lying around, right? And there are a bunch of these things lying around because I need three sets of chargers. I need one set in my house. I need one set in the bag that I take when I'm going somewhere, and I need one set in the bag that I use when we rent an office in London and we set up a bunch of gear there, and we have kind of all hands meetings. Right. Three separate sets of equipment. I wind up having to have a bunch of chargers, because every single device needs to be able to get power when it needs power. And if I have one set of chargers and I have to unplug everything and then replug everything, they're just going to be errors everywhere and it's just a bunch of additional time and labor.

[00:26:12] Vinay Gupta: If I could reliably have the Chargers that I needed sitting in the office that I rented, you know, like, hey, I need chargers for the following equipment. Will they be there when I arrive? Yes, sir. Great. I turn up there, all was there. All of those physical goods are sitting completely unused in a bag. In between those office days, all that stuff could be continually used by other people. So rather than that stuff being used, you know, two days in 14, that stuff is used, you know, eight days in ten. And that immediately cuts the environmental impact and the cost of that device by 75%. Right. If you go through and start looking at all the slack in the economy, all the things you own that you never use and all the things that are manufactured to be thrown away. If you imagine all of that stuff is being piled up and optimized out, in the same way that compilers will optimize out bad instructions in code. Literally a 50% improvement in the function of the global economy right here, right now. Boom. Just waiting to be done. And 50% is trivial. 80% is very easy to understand, 99% you really have to dig deep for. But, you know, I mean, I'd settle for 80%. That is enough. That would be good. We could do that. So.

[00:27:32] Dee: I got two questions. The first is like, it's cost me. $1,000 for six minutes with a lawyer. So six years with lawyers. And you said plural lawyers. Like, what's what's going on there? What's the what's what's that, what's that cost?

[00:27:48] Vinay Gupta: Um, so we have. Yeah. Um hum. I mean, it's not that we well, I mean, you know, like, so we have two lawyers in house. Right. We have. We have full time in-house counsel. Um, and, um, one of our, you know, one of the original founding team was, uh, UK trained lawyer. Um, the first time somebody asked me where I went to law school, I practically cried. But I'm a computer programmer. Don't ask me that question. But, you know, we've learned a lot about law. We've worked very closely with external counsel. We worked very closely with the judges in the UK, the judiciary or friends when it comes to this project. Um, but yeah, I mean, we basically sat down and said, right, how do we make it so that when I buy an NFT of a house, I legally own the house? That was what we started with. That was the goal and that's what we delivered. That actually works.

[00:28:41] Vinay Gupta: E that you know what.

[00:28:44] Vinay Gupta: The hell you may say. How does that work? But the answer is it works in a way that lawyers relate to. So we show a lawyer. So here's our statement. If you buy this NFT, it is, for all intents and purposes, the same as owning this house. Here's 40 pages of documentation that explains why. And the lawyers go page by page page page page mm page page page page page mm. Page page page mm. It is not exactly the same as buying the house. No it's not, but it has the same net expected value of buying the house. And in almost every scenario it will result in you owning the house when you want to own the house. Yes, that is fair. So are your clients comfortable buying property this way? Mhm. It saves them 4% on the transaction. Yes. Okay. Right. And that's what it boils down to. You wind up with something which is it's a little bit like eventual consistency in, uh, blockchains. You wind up with something which is almost like eventual consistency for real estate. Yeah. You buy the NFT when you want to turn the NFT into the actual legal ownership of the property. There's a super reliable way of doing it. If something goes wrong, somebody pays. And that is close enough to actual ownership that everybody says good enough for me. If they say not good enough for me, well, they need better lawyers because functionally speaking, it's good enough for anything that anybody actually wants to do, we would say, but of course it's our product. Right. And that same logic applies to gold bars and vaults, fine art, blah, blah, blah. And there's a kind of a range of mechanisms for different classes of assets. We could do it for sneakers and we could do it for cruise ships. It's literally just a methodology at this point.

[00:30:32] Jessie Broke: Is there a back of napkin calculations? Let's say the whole world moved to using Materiam for trading everything, right? My socks like I wanted, uh, I wanted thicker socks and maybe somebody in a in a winter, a cold country, you know, they their country, the climate shifts and they no longer need the socks. And we're we're down to trading small items that are, you know, not as large as a house. Have you thought about the scale in which, you know, material would have to operate in order to facilitate all this and all the man hours in order to kind of conduct all these, what would be seen as possibly petty transactions?

[00:31:11] Vinay Gupta: Yes, absolutely. So let's take something a little larger than one sock, because there are some. The problem with socks is they get washed all the time, and it's very hard to put an electronic tag on a sock which will survive like 300 washes. Right? So let's go up a little bit and say a big a big winter coat, a parka. Right. A park has probably about the smallest thing that it makes sense to do. If you've got something that is electronics, putting a digital identity on that, a point of manufacture is trivial. So for electronics you could go right down to really, really small things. But if you're talking about clothing, you want something which is kind of big enough and tough enough and expensive enough that if you put a digital tag on it, the tag isn't going to get wrecked, because the thing is being washed three times a week and, you know, it kind of there's a sort of minimum threshold driven by the electronic tag infrastructure. So, you know, winter coats, right? You can imagine a pool of winter coats that goes north and south to different people's winter. You know, on the southern hemisphere it's now summer. The coats are up north where it's freezing. Now Scandinavia is a nice solid 70 Fahrenheit. It's summer. The coats kind of go to, you know, the other cold parts of the world. They're relocated to wherever it's winter at that time New Zealand, Peru or happens to be. So there's no really decent way of doing that unless the clothing is tagged at point of manufacture. So the manufacturers, when they're making the garments, implant a little electrical chip.

[00:32:41] Vinay Gupta: Um, there are some amazing chips right now that are about $10 a unit in ten years. I would expect them to be 4 or $0.05. Right. And as those chips come down and down and down in price, you get to a point where it's cheaper to chip the garment than not to chip it, because it helps so much with manufacturing and logistics and sales and moving the thing around. And, you know, your retailers expect every garment to be chipped because if the garments aren't chipped, they can't get them into the stock control system. And you just wind up with a global norm, which is every piece of clothing is chipped at point of manufacture, and the chip refers to a database, the database is public because, for God's sakes, it's just going to be like Wikipedia for products. And it's it's each individual garment has an ID, right. So it's not all of the red jackets have the same ID number, which is like a barcode UPC code. Those things are issued by GS1. Every individual garment has a number. What is it made of? How big is it exactly? What color is it measured by color calibrated camera? Um, how many were made? What information you need on the garment varies time and place. Right. Um, this is also an AI question. So if I say right, get me a red coat that will fit me. An AI turns that into a specification, and then it goes off and searches the big databases and it comes back with options. So it's not that we expect to have a database with a trillion physical things in it, and then people are going to search it like they're searching an SQL database.

[00:34:12] Vinay Gupta: We assume that you're going to have very targeted, very intelligent systems to do search. And I think that by the time we're talking about a trillion things tagged and a trillion things tagged is not a crazy number, right? I mean, if you think about the sheer number of physical objects that you own, 8 billion people multiplied by every physical asset that they've got a trillion assets tagged is not an unreasonable number. So that searching through a trillion assets, it's not a job for human being. A search query. Right. That's a job for sophisticated systems. I would be a sophisticated system that are plenty of others. So it's warming up where you are. You want rid of the cold? Hey, I'm not going to use the S word because if I say serial, my device is going to beep. I got away with it. Hey, Siri. Then, um. Uh, no. Not you. Shush. So we say hey thing, right? Um, it's warming up. Uh, let me know when I should, you know, send my code. Uh, they say, can somebody pick it up on Thursday? They'll give you $58 for it. Uh, sure. And then the next time somebody comes to your house to deliver a pizza, or the next time somebody comes to your house to drop off, you know, a cable that you need or whoever it is, they also pick up your coat and you never see it again in 58 bucks shows up in your account.

[00:35:35] Vinay Gupta: Yeah, right. Oh.

[00:35:36] Vinay Gupta: What if the coat is damaged or torn? Well, you know, you signed a piece of paper that says this is a picture of my coat. Looks pretty good to me. Great. An eye looks at that picture and says, yeah, it looks fine. If it turns out that you took a bad picture, you did concealed something. They just take 20 bucks off your account. If you want to contest it, you're welcome to. It's a customer service problem. The customer service is probably going to be a robot too. Right. When you get into the details of this, um, before I, it was very hard to talk about. I just take off my clothes, throw them into a hamper, and magically they go away, get dry cleaned and get thrown back into the pool and money just shows up in my account. You sort of thought like, oh, people are going to have to, you know, who's going to do all the labor on this, who's going to who's going to do the customer service now? It's just like, you know, any of us can imagine a kind of robot factory that just picks garments up one at a time, scans the tags, flips them around a couple of times and looks at them and makes sure, makes sure there are no holes and then just they get shipped by, you know, logistical magic to the person that wants them next.

[00:36:43] Vinay Gupta: It's pretty. You know, it's sort of just like I mean, Amazon is now, what, 25 years old, heading for 30 years old. There hasn't really been an upgrade to the Amazon model in about 30 years. So what we're talking about is just Amazon in reverse, the same logistics that put the stuff in your house. You add some artificial intelligence, you add some digital tags, you add some blockchain stuff, and now you can take things back out again. Selling, it becomes as easy as buying it. It's just a natural counterparty to Amazon. Amazon puts them in something else, takes them out again. And it's a series of kind of achievable engineering problems. The core technologies are not quite ready to go yet. I'd give another couple of years, but most of the delay is waiting for better tags.

[00:37:27] Corey Petty: So you just described a two way Amazon in a way. Yep. And that's a big thing. Amazon started selling books online. What do you start with? I mean you started with some things already selling NFTs or house NFTs houses. So how do you how do you progress from where you are to, to becoming uh, it's being standard to say, I have Material Prime, don't you? Well.

[00:37:51] Vinay Gupta: So the first thing I'd like to do is I'd like to sell about 10 or $20 billion worth of gold bars. And I say I. What I mean is material customers. I would like material customers to sell about $20 billion of gold bars. Right. And here's why. There's about $140 billion of stablecoins. The US dollar is garbage and Usdc depegged several times. So if you were going to take your Bitcoin winnings and turn them into something that you think will hold value in two years, would you want that to be Usdc or would you want that to be, you know, $800,000 gold bars in a Swiss vault? Don't see Usdc. It's not the right answer.

[00:38:35] Corey Petty: My answer is always depends, but.

[00:38:37] Vinay Gupta: It depends, right?

Episode hosts - Demetrick Fergurson, Corey Petty, Jessie Santiago

Vinay Gupta is a cryptographic applications developer and part of the original Ethereum team. In this episode, he introduces his company Mattereum, which focuses on securitising physical assets on the Ethereum blockchain.Corey, Dee, and Jessie talk to Gupta about Mattereum's goal to provide a scalable and legally-regulated way to conduct transactions involving physical assets, envisioning a system where blockchain functions as a namespace registry, while transactions happen on more efficient and ephemeral layers.

<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><a href="https://twitter.com/leashless">Vinay Gupta</a> is a cryptographic applications developer and part of the original Ethereum team. In this episode, he introduces his company <a href="https://mattereum.com/">Mattereum</a>, which focuses on securitising physical assets on the Ethereum blockchain.</p><p>Corey, Dee, and Jessie talk to Gupta about Mattereum's goal to provide a scalable and legally-regulated way to conduct transactions involving physical assets, envisioning a system where blockchain functions as a namespace registry, while transactions happen on more efficient and ephemeral layers.</p><section class="footnotes-container">&nbsp;</section>