JOSHUA KLEIN: A little
bit of background.
About 10 or 15
years ago, I started
doing IT security stuff,
eventually ended up
working with a lot of
three-letter agencies
down in DC, and started learning
about a lot of the capacity
and capabilities that we all
have recently learned about.
Thank you very
much, Mr. Snowden.
So seeing that come along,
as my career progressed,
I started working more
with large companies,
started seeing big companies
get similar capabilities,
witnessed Google.
But at the same time, from
the other side of the fence,
in IT sect., seeing people
develop new platforms
and new opportunities for
exchanging goods and services,
like drug sales or
arms deals and stuff.
Fun stuff like that.
So it got me thinking
what's actually
going on with commerce,
what's happening with us,
and is Bitcoin serious.
Does anyone here
have any Bitcoin?
It's always one of the
guys in the front row.
So that's a little bit about me.
So that made me ask
the question, what's
happened with commerce?
And that led me to this book.
So starting off, I want you
to ask yourself this question.
What is your mother worth?
And the reason I want you to ask
yourself what it means to you
is that I think it's
going to determine
your wealth for the
next five to 20 years.
So the first way
that most people
answer this question of
what is your mother worth
is to say that your
mom is worth whatever
anybody will pay for her.
Which sounds a little
naughty, but is actually,
if you think about it from
a capitalist perspective,
pretty typical.
If you're Hallmark, you might
say that your mom is worth
$1.50 because that's what it
costs for them to acquire her
as a customer in order
to buy a $5.00 card.
If you run a
retirement home, you
might decide if she's worth
quite a bit more because
of the amount of money
that she'll spend over
the course of her
staying with you.
So breaking things
down into cost
is actually a pretty
intuitive, normal way
of valuing goods,
services, and people today.
Now to really think
about it, we have
to consider why
money came about.
And I'll keep this brief
because you're all smart people.
But the basic answer
to that is that money
allows us to answer
questions of scope, scale,
and storage that we can't
do with trade, barter,
and gift alone.
So if you and I live in a
small town and I'm a potter,
I can take my pots and
I can sell them to you.
And if you give me some money,
I can then wait until wintertime
when I'm hungry, and then I can
go to the butcher and say OK,
now I would like
some meat instead
of going to the
butcher with a pot
and saying would you
like a pot right now,
and then you can
give me a stick.
So it lets us store
our money, which
is our value, which is
really, really good.
The next thing it lets
us do is scale it.
So I could sell pots to
the butcher, the baker,
the candlestick maker and
save all that money up.
And then at the end of the
year, I can go to the carpenter
and say, "Here's all this money.
Give me a house."
The last thing it does is
it gives us some scope.
So I can give a bunch of
pots to a merchant who
would go to the next village
over where I have never
gone because that
is so far away.
And he can sell those pots,
and then come back and say,
"Here's your portion of it."
So money lets us
do lots of things
which are really, really useful.
Now what's interesting is that
if you fast forward to today,
we're now at a
point where we are
able to gather massive
amounts of data
and start increasing the
resolution on what people,
services, and goods are worth.
Because we're able
to drive down deeper
and deeper into
the relative value.
So for example, one
Amazon, if you guys
connect to amazon.com
from here and go
to buy something, some
cheese or something,
you'll get a certain price.
If you go out to
Bushwick, you're
going to get a totally
different price because they're
going to give you
different prices based
on where your connecting into.
So this is dynamic pricing.
And it's not actually
very different from what
you get going to a deli here
versus a deli in Bushwick.
They're going to have
different prices as well.
What's interesting
is we're starting
to see that that
pricing is happening
at a more personal level.
So for example, about
five years ago, Microsoft
came up with a couple patents.
And we know that if
Microsoft has patents on it,
everybody else has already
been working on it.
So the first patent allows
them to assign a number
to anyone's ability to influence
others around a word or topic.
So again, if you have a very
popular blog about cheese,
then you might have a very
high score for the word cheese.
So they'll say you have 87.
On the other hand, if I've
only ever tweeted once
about being lactose
intolerant, my cheese score
might be very, very low.
The second patent allows them
to dynamically price goods
and services based on the same.
So if you go online to
buy some Kraft singles,
Kraft might decide
that because you
are so influential around
the topic of cheese,
that they're going to
reduce your price by 50%
because if you do
buy their product,
you might say
something good about it
and amortize their
marketing costs.
On the other hand,
if I go to Amazon
and try and buy
some cheese, they
might decide to triple the price
because I'm nothing but a media
nightmare when it
comes to cheese eating.
So it's interesting
that this is happening.
It's essentially
the same phenomena
as we get with
Coca-Cola machines.
They change their prices based
on how hot it is outside.
Except now, we're able
to do it individually
for every single person
in any given context.
So that's using big data.
It's gathering all
this information
and hyper-personalizing
the pricing.
What's curious is that the
same ideology of gathering data
and using it to filter down to
exactly what one person can pay
maximally for any good service
or-- we'll just call it goods
or services for -- it's starting
to filter out into the real
world.
So you all know that city
buses have cameras on them.
Did you know that
many of them now
have microphones that are
being put in the seats?
And this, of course,
is because it
allows them to record
your conversations,
and then do speech to text, and
then do searches for keywords.
So, obviously, law enforcement
has a hand in this.
But at the same time, it also
makes really good marketing
sense.
If you're looking at a
sign for an ad on the bus,
they would like to know
what you're talking about.
And if you're using the
word or a name associated
with the brand.
Similarly, we're
starting to see stuff
like infrared cameras that
are being installed in stores.
So a lot of stores did this
for a while for market testing,
but they're starting to be
regular installations that
are always there.
They basically follow your
eyes and see which products
you're looking at
and for how long.
And now there are new
products coming out.
Like picosecond
lasers which should
be being deployed in airports
over the next couple years.
Picosecond lasers are
able to sample everybody
in a 50-meter radius and
determine heart rate, body
temperature, respiration,
stuff like this.
It can also do-- I believe
it's spectrum analysis-- that
allows them to determine
how much adrenalin you have
in your body or how
much caffeine you've
consumed that day.
So you can see that gathering
all this information
together gives someone a really
good idea of what you might
want to pay for anything
in any particular context.
So that makes the answer to
this question very finite.
It means we know exactly
what your mother is worth.
But before money, we used
a very different system.
We used trade, we used
barter, we used relationships
to determine how much
of something was worth.
We get a good or a service.
So this is basically how human
brains evolved over time,
was to figure out that
you and I worked together
last summer on a project.
And this winter, I
bailed out your basement,
but you dated my sister, and
you were kind of a jerk to her.
And now we're going in
to trade corn for pots
or whatever it is.
That's all going to
weigh in, and it's
going to be something that
we can actually figure out
in terms of exchanging value.
So the way I'd like
to summarize this
is with an anecdote
about your sister.
And so far we talked
about your mom.
If, for example,
you raised sheep,
and you had an excess of wool,
and you also had a sister,
and you'd forgotten
your sister's birthday,
but your-- and this is getting
very complicated, I'm sorry,
I'm telling this all wrong--.
But if you forgot your
sister's birthday,
and your sister had
a knitting club,
and you had an excess of wool,
then traditional economics
would say that you should
take the wool to market,
sell the wool, take
that cash value,
and then give the cash
value that represented
the ire of your sister to
your sister to buy her off.
Because you want to
use money as the most
fungible good that you have.
I don't know about
you, but if I tried
to give my sister money
for her forgotten birthday,
I'd get a punch in the face.
This is not going to work.
It's not how human beings work.
It's because my sister
and I have a relationship,
and she expects
birthday-related exchanges
to be loaded with meaning.
So, instead of selling
that wool on the market
and then trying to
give cash to my sister,
I could take the wool
and give it to her
to use with her knitting club.
Now, this sounds obtuse,
but if you think about it,
if you're in that
situation, you would
have a good idea how much
wool to give to your sister.
If I asked you
how much money you
would spend on your
sister for her birthday,
you'd probably have
a pretty good idea.
So that ability to take all
these fuzzy bits of context
and stitch them
together is part of what
enables human beings
to do real exchange,
relationship-based exchange.
One of the reasons
that this is important
is that it demonstrates that
what we have that's of value
is not just our net worth,
not just our financial worth,
but related more
over to our net work,
the value of our net work.
So a lot of this comes from
the pre-financial models
of exchange that we
are used to using,
which has some advantages.
So, for example,
they're richer in that
if I have an excess of pots
and you have an excess of corn,
but you happen to
really want pots,
and I happen to
really want corn,
we can trade at better
than market rate.
But again, that's tempered
by our relationships.
The downside with these
pre-financial models
of exchanges is that
they're really limited.
That might work
with you and I if we
live in the same small
village, and, in fact,
that's how most
exchange evolved.
But if I try and trade with
the guy in the next village,
who happened to wonder
over into our village
and swears he'll
come back next fall
and give me pots, or corn,
or meat, or whatever it is.
That's not going to happen.
Because there's
no accountability
in terms of our relationship.
What's interesting about
that is that we're now
starting to hit what I call
the reputation economy.
Hence the title of the book.
Which is to say that
your small village is now
the entire world.
Welcome to the internet.
You all already know
about this because you're
working for the internet.
One of the things that's
interesting about it is we're
starting to see really old
models getting ported online.
So if I wanted to find
somebody in my neighborhood
that had a lawnmower
I could borrow
and who wanted to borrow
my hedge trimmers.
I could do that
with neighbor goods.
If I wanted to find
someone who would drive me
across town without
driving into a light pole,
and do it for a cost that
I was willing to pay,
I can do that with Uber.
Depending on what happens
with New York and Uber.
Maybe I could do it with Uber.
If I wanted to find
a community of people
who are interested in the
message that I wanted to share
and who had a message
that I wanted to share,
I could do that with a
service like Headliner.
So we're starting to find that
there are old systems, which
are basically trade and
barter, things which are based
on reputation or the
ability to get information
about somebody else
enough to assess
the relative value of a
non-financial exchange,
now appearing online,
This is curious
because it's letting us
do things at a new scale.
So for example, at
one point, I talked
to a student who really wanted
to get an internship at company
X. But he didn't know
anyone at company
X. So what he did is he took
his World of Warcraft account,
and he loaned it to
another friend of his.
And had that friend loan his
car to another friend of his
who wanted to take
a girl on a date.
And that friend
then talked his dad
into recommending the first guy
for an internship at company X.
Makes sense.
That's what we
call "friendships."
And it turns out
that it's really
intuitive to how
human beings operate.
Well now, you can get
online and do the same thing
because you can find out enough
information about other people
to make those connections.
That system, by
the way, is really
similar to something
called Hawala.
Hawala is a method
of exchange that
came out of the Middle East
around the eighth century
and basically was used for
long distance value exchange.
Hawala is still used today.
It's primarily used
by diaspora that
are sending money back home.
The way that it
works is, let's say
I wanted to send $100 to
my mom in Afghanistan.
Kind of difficult to do.
Trade embargoes, banking
is all kind of dicey.
But I can go to the place
where I drink my tea,
I can find a Hawaladar
who is someone
who does Hawala exchange.
I can give them $100,
give a password,
tell them where my mom is.
And then he connects to a
Hawaladar he knows and trusts,
and says, "Here's $100."
Or, "Here is access
to my eBay account
that has a really
good seller rating."
Or, "Here's my car.
Borrow it for the weekend."
Or, "Here's some
black tar heroin."
I don't know what it is
that they're trading.
But they exchange
$100 worth of value.
That Hawaladar then
does the same thing
with some other
Hawaladar he knows,
et cetera, et cetera,
et cetera, until it
gets to Hawaladar in
Afghanistan in the village where
my mom lives, who goes to
my mom, and says, "Hey,
what's the password?"
She tells him, and
then he gives her
$100 or the equivalent
in local currency.
Now this system has
a lot of advantages
because it's based on trust.
So it's really flexible.
It's also not subject to
taxation, or trade embargoes,
or being traced.
So these are all very
helpful elements.
Interestingly, during
the 9/11 attacks,
the FBI was certain
the terrorists said,
"Use this to exchange all of
their value, " when, in fact,
they had used an
FDIC-insured bank in Florida.
And the reason that
this happens is
that no one who works
in Hawala, no Hawaladar,
is going to trade money for
terrorists because that's
really bad PR.
And when your entire
business model
revolves around trust,
that's not something
you're willing to screw with.
So it's not a great surprise
that Hawala as a model
has been ported online.
So Peter Thiel recently
invested $6 million
in a company called
TransferWise,
which does exactly that.
So the big question
for me is why are we
starting to see all
these new systems appear?
Why are they happening now?
And I think there's
two main reasons.
The first is that
people are beginning
to be more interested in
meaning than in money.
And by that I don't
mean that people
don't care about money anymore.
I mean that Airbnb, for example,
is growing leaps and bounds
over companies like Hilton.
Or that car sales are
down year over year.
In other words,
people are starting
to be interested in having
experiences or richer, fuller
lives more than
they are in status
symbols like a new car
or the corner office.
At the same time, we're also
seeing the financial economy
pretty much sucking
it, and we're all
curious about how we
can get more leverage
with the resources we have.
And what people are
starting to realize
is that they have, in fact, a
lot more value in their lives
than they realized.
So for example,
Skillshare lets you
go take that hobby that you
have and start teaching it
to strangers in
exchange for some cash.
Or if you have a car that you
only drive on the weekend,
you can rent it out
during the weekday.
Or if you happen to be really
good at assembling Ikea
furniture, you can go do that,
whenever and wherever you
feel like, using TaskRabbit.
So in other words,
there's lots of platforms
that are out there
that are letting
us move elements of value that
we previously couldn't tap.
This is all academically
potentially interesting,
except for those
people who left.
They didn't find it interesting
I find it super-interesting.
And the main reason that
it's of value to me,
is that all these traditional
models of exchange
that we're talking about,
these gift-barter relationship,
reputation-based
models of exchange,
are currently in use today.
They're just
primarily used as part
of what we call
the black market.
And the black market
is really big.
It's $10 trillion.
The only larger
economy in the world
is the US economy
at $14 trillion.
It's growing really fast.
By 2020, two-thirds of
all the world's workers
are going to be
exchanging value on it,
and it's going to be
the biggest market
in the world in the
next 15 years or so.
And it's also the only really,
really, truly global currency.
Every place that you have
a traditional currency
or a traditional market,
you have the black market.
So here in the US,
for example, they
estimate that one
out of every $7
is exchanged on
the black market.
And if you think
about it, that doesn't
mean that everyone's
swapping heroin.
It includes stuff like
paying the baby sitter,
or buying a cookie
at a Ren Faire,
or whatever it is
that you're doing.
So that's the first fact,
black market really big,
using all these models.
That's interesting, but
it gets more interesting
when you consider that right now
all these platforms that we've
put online, the Airbnbs,
the Skillshares, the Uber,
the TaskRabbits, et cetera,
are currently being used only
by one-third of the human race.
The other two-thirds
aren't on the internet yet.
And those two-thirds
are the ones
that are mostly using these
other models of exchange.
So what happens when, over
the next five to 20 years,
two-thirds of the
human population
suddenly come online with
smartphones and tablets
and other things that are
penetrating all these emerging
markets.
And they have value that
they want to exchange.
They want to buy things.
They want to sell things.
Are they going to walk down to
Citibank and open an account?
I don't think that that's
what's going to happen.
I don't think that that's
going to be intuitive to them
or useful to them.
Not least because
Citibank is going
to require that they
have a steady address.
It's going to require that they
have a social security number.
It's going to require that they
fill out a lot of paperwork,
that they be literate.
These are not things that
everybody in the world has.
But all of those people can
easily open a Bitcoin wallet.
They can get a square
dongle that they
can put onto their phone and
swipe people's credit cards.
So I like to call this
Capitalism's Napster Moment.
Basically, what we've
got is a massive amount
of platform-- a huge
number of platforms
that are starting to bubble up
that are threatening existing
financial models.
And we all remember what
happened with Napster.
Shawn Fanning said,
"Here's free music.
Everyone can download
all that you like."
And the RIAA came along
and said, "Yeah, you're
crapping on our business model."
And they shut them down.
And then the internet did
what the internet does.
It said, "Oh, we can't get free
music, and here's BitTorrent."
And then RIAA started shutting
down BitTorrent sites.
And we came up with invite-only
file sharing sites, and better
anonymity software,
and better crypto.
And this went on and on until
Apple came along, and said,
"OK, look, we'll
give you your song,
and we'll even bundle it with
a music player, and some cover
art, and we'll curate some songs
for you, et cetera, et cetera.
And we'll charge you $1
for the whole thing."
And a lot of people
said, "Great!
That sounds really good."
But it didn't
replace music piracy.
You can still go and
download music for free.
I hope I'm not shocking
anybody with that claim.
So I think that that's
exactly what's happening now
with the Ubers and the
Airbnbs, et cetera.
A lot of these models are going
to be crushed because they
do threaten existing large
institutions that are heavily
invested in financial
models of exchange.
But what's going to
come up to replace
them is going to be stronger,
bigger, faster, more flexible,
and better suited for the
two-thirds of the world's
population that are
about to come online.
So my question to you
guys, specifically,
because you're in the
business, supposedly,
of writing technology
for the internet,
is whether you are
continuing to write software
to develop products that
are designed to extract
increasingly high resolutions
of financial value from people.
In other words, to get
more money out of them.
Or are you building
for your mom?
There we go.
Thanks very much.
So that was a little bit janky.
But there you go.
Were there are any questions?
I'm glad I convinced
every one of you.
AUDIENCE: I have a question.
So I think--
JOSHUA KLEIN: Explain
your background first.
AUDIENCE: My name
is Michael Kim.
I work in sales
doing data analytics.
So I guess my question
is around the idea
of trust plus scalability.
Part of me thinks
that relationships
require authenticity,
in a certain sense.
And as soon as you try to
systematize relationships
or give a number or a score
or something like that,
you somehow lose some
of that authenticity,
or it becomes the
system, or the man,
or whatever you want to call it.
I see two possible solutions.
One is, people get used to
it and they drop their guard
against systematized
scalable authenticity.
Or maybe some new company
comes in, they figure it out.
They figure out that
puzzle of exactly how
to scale authenticity.
Which method do you
think is more probable,
or is it some other method
that I haven't thought of?
JOSHUA KLEIN: You're talking
about the clout argument.
You have one centralized
measure of influence,
which is completely crap,
if you want my opinion,
since that's what you asked for.
I think that, yes, people are
able to scale authenticity,
depending on the value
of the transaction
that they're looking to make.
So I'm willing to, on very
small amounts of information
about you, determine
whether or not
to buy or sell
something to you for $5.
Whether I will leave you
at home with my infant son,
going to require a
little more background.
The good news is that we're
now able to go online and get
lots and lots of different kinds
of contexts around individuals.
So whereas I could go to clout
and determine whether clout
thinks you're really
able to influence others,
that's not going to tell me
anything about your ability
as a babysitter.
But I can go online and
look at your Facebook page,
I can look at what
you posted on Quora,,
I can figure out if you put
stuff on Stack Overflow.
And between looking at those
different aspects of who
you are, get a
better idea of who
you're likely to be in
the context of taking
care of my son.
Does that answer
your question at all?
AUDIENCE: Yeah, I think so.
JOSHUA KLEIN: I'm surprised.
You didn't look convinced.
AUDIENCE: Well, I guess that
is like a high effort endeavor.
And so I guess the idea of a
one-stop, not one-stop, but how
do you make that accessible
to everybody who maybe doesn't
know about the 15 hours?
Or in your other example of
bringing the other four billion
people online.
They don't have a full high
resolution digital persona,
and they don't have all of that.
So how does that fit
in with that idea?
JOSHUA KLEIN: And that's the
big question that many of us
are trying to grapple with.
For example, can
you use cryptography
to authenticate
multiple accounts
and aggregate them in one place?
Which allows you to tie
different kinds of context
together, but authenticate
them as being from one user?
Can you do semantic analysis
to get derivative information
about people?
Can you make one system
that's so big that everyone's
basically a part of it?
And we don't know what
the answer to that is.
What seems to be the
case is that people
are willing to do high
value exchanges with people
that they've met in real life.
And the degree to which they'll
exchange value with people
that they don't
know in real life
operates on a step
function off into nothing.
The difference is that over
time, the amount that people
are able to or willing
to exchange is rising.
So Airbnb, for example.
When it first happened,
everyone thought
that this was absolutely
crack smoking.
And now, it seems normal.
AUDIENCE: I think
that makes sense.
Thanks.
JOSHUA KLEIN: Were there
any other questions?
AUDIENCE: Yeah, I have one here.
My name is Travis.
I work in video ads.
I was wondering,
what do you think
about the traditional
marketing out there?
How is it going to influence
how the black market is going
to grow in a merge over
the next five to 20 years?
JOSHUA KLEIN: So,
excellent question.
I do not have a
good answer for you
because it is such
a good question.
I think that it's
having two effects.
On the one hand, people are
getting better and better
at ignoring advertising.
As with billboards or
radio ads or anything else,
people are getting pretty
skilled at tuning them out.
We're also getting
better software
for blocking them, if it
happens to really bother you.
At the same time, those ads are
able to get greater and greater
resolution on what's
actually relevant to you.
So if I'm in the market for
third-party mods for my Prius,
getting ads for third-party
mods for my Prius is,
that's not bad.
That doesn't bother me because
I'm actually looking for it.
So there's some sort of a
tension between people being
marketed to and people
looking for information.
So that's one aspect.
The other aspect is
embodied in Facebook's
condescending
corporate brand page.
Which if you haven't seen
it, I totally recommend it.
Basically what they do is they
document all the misplaced ads
that people do on
social software.
All the smarmy ads are
the ones that are like,
come friend our cheese company
that no one really cares about.
And I think that
that's really the core
of the problem is
that lots of brands
are using the traditional
marketing model of shouting
at people when what people
want to have is a conversation.
They want value added
from participating.
And that value can be
as little as feeling
like they contributed some
insight to the conversation.
Does that address
your question at all?
AUDIENCE: Yes.
Thank you.
AUDIENCE: So in
the old days, when
we bought it by knowing people
and what they could do for us,
it was pretty simple.
We didn't know that
many people, and we
could keep track of whether
they were trustworthy or not.
JOSHUA KLEIN: Right.
AUDIENCE: But when scaling
this to an internet scale
of billions of people, you
can't know that many people.
So you rely on a reputation
system or something like that.
But all the ones we've seen,
people try to gain them,
often successfully.
Do you have thoughts on what
we can do to combat that?
JOSHUA KLEIN: So I like to call
this the Friendster effect.
Which is to say that if you have
a system which is significantly
gamified, but doesn't
create any extraneous value,
then it will bankrupt itself.
So Friendster came
out, everyone's like,
"Awesome, I can see how
many friends you have."
It very quickly
became a game where
everyone tried to
get as many friends
as they possibly could
as quickly as they could.
And shortly thereafter,
everyone realized
that the number of
friends that you had
didn't indicate anything
except for your dedication
to Friendster.
And if you had
that many friends,
then you were staying
at home very lonely,
with nobody but
you and Friendster.
So I think that's one
answer to the question.
Which is to say,
the systems that
are only measuring your
influence or your ability
to interact or
your relative value
are going to
bankrupt themselves.
The second element to
it is that, as people
get invested in these accounts
through participation,
whether that be the community,
like on Stack Overflow,
or exchange of goods or
services like on eBay,
those accounts acquire value.
And if you make that value
somewhat transportable,
it just exacerbates the effect.
So if I can use my
eBay seller rating
to then go sell on another
platform or to get a loan,
there are systems that will
check your eBay seller rating
and then instantly give
you a loan based on that.
I think you'll see people
adhering to them longer.
And I understand that
it's context-dependent.
In this case, a
seller-buyer relationship.
But I think that that
answers a little bit
of the question of
how portable they are.
Does that address the question?
AUDIENCE: That's
one answer, yes.
JOSHUA KLEIN: That's
one answer, yes.
I'll take it.
AUDIENCE: Daniel Lujan.
I'm an old-time computer guy.
Who do you think does a good job
at the reputation for commerce?
There are lots of people
who have got them.
Who's doing a good job?
JOSHUA KLEIN: What do
you mean by good job?
AUDIENCE: Well, you
mentioned EBay as seeming
to have something that
there's enough people invested
in it that it will
converge to decent value.
What other systems
meet that criteria?
JOSHUA KLEIN: It's too bad you
followed up on your question
because I was going to talk
about reputation.com that's
doing lots of astroturfing.
Who else is doing a good job?
I don't really have a
good answer for that.
I feel like it's so
nascent right now.
And most of the platforms
that are out there that
are evaluating
reputation explicitly
are only for selling and buying.
Maybe Airbnb or Etsy.
Both do a pretty
good job because they
are focused pretty
solely on you building up
your individual brand.
So they very, very
clearly made themselves
into platforms instead
of into a store.
And I think that that's part
of it is allowing individuals
to have culpability for
their own brand, which
is to say themselves.
Also Stack Overflow?
Yeah, sure.
Another good example.
Although that has the
interesting benefit
of allowing you to
be pseudo anonymous.
Whereas with Etsy
and Airbnb, you're
supposedly
representing yourself.
Which is curious.
Any other questions?
AUDIENCE: Yeah, my name is Ryan.
I'm in ads here.
So actually, you
just said something
that inspired a question that
I didn't have, but now I have.
So how does a non-amenity
and reputation
economic interrelate?
JOSHUA KLEIN: Right.
So on the internet,
you have authenticity
and you have identity.
So identity is, I'm Josh
Klein, here's my address,
here's my social
security number,
here's my bank account number.
Authenticity is, I'm
dragonwriter 15 on Flickr,
and I can
cryptographically prove
that dragonwriter
15 on Flickr is also
the same guy in the toast
sculpturists of America forum
who just posted about
my toast sculpture.
And I can also
cryptographically prove
that I'm the guy was has
this Bitcoin account.
So that latter part,
which is "anonymous"--
and I say that in quotes because
obviously with enough Metadata,
you can figure out
who anybody is.
But that anonymity
allows me to investigate
in a reputation that could have
many, many different aspects.
So one of those accounts might
be an eBay seller account
that has a very high rating
and is very well trusted.
So this means that I don't
need to know anyone's identity
to find them trustworthy and
to have an exchange with them.
And I think that
that's really important
because online, one of
the really big benefits
is the ability to
experience things using
a variety of different
aspects of yourself
or to employ anonymity.
And it's not just because
you want to buy drugs.
So that ability to
use authentication
using stronger crypto
is an important aspect.
AUDIENCE: Thanks
for that answer.
The first question that I
had was actually about what
happens to traditional models of
evaluating people's worthiness
for things such as mortgages?
What happens to financial
scores in the future?
What happens to-- away from
financial domains-- what
happens to test scores
for getting into college?
JOSHUA KLEIN: That's
a good question.
And it ties back to
what you're talking
about in terms of
gaming systems.
Because if you're able to
create a new account for one
specified purpose, then you
can gain things more easily.
I don't know what
the answer is, but I
think it has to do with either
restricting domain access.
So saying, hey, you can
come and participate
in our college score
testing program,
but we'll give you one
account, and you could use it
over a long period of time.
And we can evaluate at the
end, within that very specific
domain, whether your
participation indicates
that you're real or a bot, or
whether you and many friends
gathered together to create the
account, et cetera, et cetera.
The other aspect is
probably around the ability
to gather massive
amounts of data
and do clever analysis to it to
determine whether there's truth
there.
I don't have good examples
of either of those,
but that's just my intuition.
You're doing both mics now.
AUDIENCE: Yeah, I know.
This one's--
JOSHUA KLEIN: I recognize you.
AUDIENCE: So you had mentioned
that people are moving away
from measuring their life
with financial terms.
You mentioned that
they're trying
to lead a more fulfilling life.
Have you thought about anything
that's actually driving that?
And is there any
other potential side
effects you might see,
their effect on society?
JOSHUA KLEIN: Yeah.
So the big side effect
that I think is interesting
is the demands for transparency
from large organizations.
And also the push back
in terms of people
wanting to reclaim
their privacy.
Both of those are examples
of people recognizing
that there are non-financial
elements of value in our lives
that they want to
remain in control of.
Some personal data being one.
In terms of people wanting to
go scuba diving in the Pacific
instead of buying a new car,
that's just financial trends
that we've noticed
over time that I've
got from different
marketing organizations.
And it seems to be
fairly pervasive.
Maybe it's just a trend.
Personally, I think
it is a conjunction
of both the infinite access
to product information
that we have online.
So I know that there will always
be some new shinier, better
thing than what I have.
And the ability to fool myself
that this particular Amazon
purchase will fulfill
my life is diminished.
We also have more
access than ever
before to the
relationships that allow
us to build things
that actually matter.
So no matter how
lonely you are, you
can still make an
OK Cupid account.
By the same token,
we're starting
to see stuff where
college students are going
and cultivating relationships
with DJs because it gets
an invite into the back of the
club when they know they can't
go in the front of the club and
buy themselves VIP room access.
So that's leveraging of
relationships instead
of leveraging finance
is because of the fact
that less people
have more money.
Does that answer your question?
AUDIENCE: Yeah.
JOSHUA KLEIN: You guys are good.
This is interesting.
Anything else?
Because if not, I'm going
to go get some lunch.
All right.
AUDIENCE: You hinted
at it a couple times,
but using cryptography
to validate identities.
You talked about that.
Do you have any
other ideas of where
Bitcoin is useful in
that area of validating
anonymous identities,
I guess you could say?
JOSHUA KLEIN: Well,
the value of it
is that you can have different
kinds of accounts that
are linked in a variety of ways.
So I can have leather bitch
97 as one of my accounts,
and I can have the Brony's.
I could have a Brony account.
And these two might
not play well together.
I don't know.
I'm just grasping
at straws here.
But I can use both of these
accounts and keep them separate
and then find ways to
transact value between them.
So due to the way
that Bitcoin is made,
you'll see a transaction
between them,
but I could use
intermediaries to try
and scramble that little bit.
Where I think cryptography
is really interesting
is in allowing these
transactions to occur over
a time in a trusted way
between accounts that otherwise
wouldn't necessarily have trust.
So we're going to leave
leather bitch alone,
but the Brony account might
have established a really solid
reputation And
through that decide
to transact with somebody
else and determine,
due to their online behavior,
that they're trustworthy.
Bitcoin and similar
cryptographic tools
allow them to then
make that exchange
without ever having to recognize
that those other accounts
existed.
So that's one of
the-- were you asking
about what the
potential value was?
AUDIENCE: No, [INAUDIBLE].
JOSHUA KLEIN: Interesting
uses of crypto?
It's hard because
it's so atypical.
PGP, which is typically used
to encourage mail-- which
you may have noticed in the
news is of increasing concern
to some people-- that's been
around for, what, 20 years?
And all it takes is pressing one
button when you write an email,
and we can't get people to
use it to save their lives.
Why is that?
It's because it's
additional hassle.
So I can give you other
cases where it's useful,
most of which will probably
be pretty apparent to you.
It's just that getting people
to do it has been hard so far.
And whether that changes
as a result of recent,
like Snowden's reports
and whatnot, or the rise
of these platforms
remains to be seen.
Is there a hand over here?
No.
OK.
Thanks very much for coming.
I appreciate it.
