Episode 311

MIT’s Digital Currency Initiative – Why We Need Blockchain Ethics

Rhys Lindmark

Blockchain and cryptocurrencies have the potential to change the world in meaningful ways. And this change may drastically impact people’s lives – both for the better and for the worse. While ethics are often discussed for technologies like AI, the ethical considerations around blockchain technologies have received less focussed attention.

We’re joined by Rhys Lindmark, Head of Community and Long-Term Societal Impact at the MIT Media Lab’s Digital Currency Initiative. Previously the host of the podcast “Creating a Humanist Blockchain Future,” Rhys’ approach to blockchain was always about considering its potential impact. Since joining the DCI, his podcast, now “Gray Mirror,” continues to explore these questions. He has also recently started teaching a blockchain ethics course with the DCI’s Director, Neha Narula.

Topics discussed in the episode

  • Rhys’ background as a podcaster and proponent of Effective Altruism
  • His advocacy work around universal tithing and donating to charity
  • The controversy surrounding the MIT Media Lab and the resignation of their Director Joi Ito
  • The difference between ethics and morals
  • Why we need to study blockchain ethics
  • Should we have ethics committees in blockchain as there exists about AI
  • The ethical considerations for different use cases and applications of blockchain technology
  • The role of miners and should they have ethical obligations to censor certain transactions
  • The DCI’s blockchain ethics class and what students learn

(8:11) Rhys’ Background
(10:22) What being “head of community and long term societal impact” entails
(11:43) Grey Mirror Podast, and Creating a Humanist Blockchain Future
(13:03) Effective altruism
(18:04) How giving so much to chartiable causes is explained
(21:32) How to optimize your impact
(24:28) The difference between giving direct, and changing the system
(27:06) What’s happening at the Media Lab and DCI in relation to Epstein
(39:19) How Rhys got started with the blockchain ethics class
(43:47) The differences in ethics process of blockchain vs existing process in AI or BioTech
(47:27) The ethical obligations behind miners and how they could collude to censor transactions.
(50:05) The parts of the internet blockchain stack, apart from miners, that lend themselves towards regulation
(55:37) Managing the many varieties of public, permissioned, consortium
(59:02) How to get the balance of the use of tools
(1:02:00) Rhys’ view on blockchain will find a niche, without causing a major paradigm shift
(1:05:27) The role of nation-states in relation to the future of blockchain
(1:07:40) What Rhys has learnt since starting this this course and its future


Sebastien Couture: Rhys, thanks for joining us today.

Rhys Lindmark: Yeah, excited to be on the show. I’ve been a fan for a while and excited to chat over Zoom today.

Sebastien: Well, likewise, I’ve been a fan of you and your podcasts and just your work in general for the last little while since we met. I can’t remember where we met.

Rhys: I think at DEVCON3, or at least that’s the first time we met in person.

Sebastien: Yeah, that’s probably right. So tell us a bit about your background who you are and how you became the person that you came to be?podcast

Rhys: Well, we were just talking about this before the show. It’s lots of conditioning in childhood and all of that. And I think more generally, within the blockchain cryptocurrency world… I guess I was a computer science major, going into college and was always into math and science things. And after college, I did a music education startup for a bit, but around 2016 it was Trump and it was Brexit and it was all those things. And I was hmm, should I really just be focusing on making music education apps for kids? And the answer was no. And so I left and took a more macro take on society in the world, and put on various lenses that we might talk about, over the show, effective altruism and systems thinking and things that, thought about how I could have the most impact on the world. And from that perspective got into blockchain cryptocurrency technology as a powerful thing that is a both a decentralizing force which is powerful if you want to create anti fragility in a system, and also as a source that changes how we think about trust and money. And when you start to change core primitives, trust and money that is also powerful for changing a macro system. So essentially got into blockchain and crypto at that time, I guess, two and a half years ago. And from there, did a variety of things in the space I helped start the first ETH Denver and get ETH Global off the ground to some extent. And then was doing podcasting. As you noted, I have a podcast called gray mirror which everybody can listen to. I was all self funded through Patreon at that point in time, and a year year and a half ago, is When I joined the MIT Media Lab, and specifically the digital currency initiative, as a head of community and long term societal impact. Yeah, so that’s my background and how I got here. And there’s a sub strand as well or parallel strand about, how I think about ethics and how that relates to my professional life. But that’s how the tech side of me has progressed through time.

Friederike Ernst: We’ll we deep dive into many of the things you have talked about, but let’s go to the MIT Media Lab. So head of community and long term societal impact. That’s a fantastic job title. So what does this position actually entail it?

Rhys: Yeah, good question. Well, it was the job title was made up by myself and my boss. I think that long term societal impact is honestly the most the more important piece, though the community piece shows that I’m having that impact not through code. I don’t code anymore, but rather through norms and teaching and those kinds of things. So I guess when I think about my job, it’s primarily thinking about as, as the title says, thinking about the long term societal impacts of blockchain cryptocurrency technology, and then trying to shape them in a positive way. So that can look podcasting, or I’m teaching a class this semester on blockchain ethics. It can also look going on this podcast, doing some writing. So a variety of small things that, we’re helping to build the academic field of blockchain cryptocurrency technology with other fields besides ethics, law and computer science and economics. But ethics is also a piece of that. a mismatch of a variety of non coding things in thinking about the positive impacts of the tech.

Sebastien: Cool. So before you came into this position, your podcast was called creating a humanist blockchain future, which I thought was the greatest name for a podcast. What was the transition from that into grey mirror? How did that happen and covering the same Topics Is it the same podcasters as another podcast? Or is it just a different name?

Rhys: So creating a humanist blockchain future, when I think about now, it’s Man, that was a funny title too long. Also, no one could remember it. When I tell people the title, they could not remember it. I changed the name because I didn’t want to focus exclusively on blockchain. And I wanted to focus more on the loop between how tech changes society and how society changes technology. And so gray mirror the idea behind that name was to say, hey, instead of Black Mirror, the Netflix show where tech changes society and all negative ways, we should think about tech changing society, both positive and negative ways. And so that’s what I the topics that I tackled my show are the positive and negative ways that tech society and ethics all co-evolve and interact with each other. So no real it’s all the same podcast and RSS feed, but now it is just I guess it’s technically within the digital currency initiative, and the focus is more wide in scope.

Friederike: You’re an outspoken proponent of effective altruism, for the folks out there who are not familiar with this concept. And what is effective altruism? And can you explain what got you into that?

Rhys: Yeah, good question. Let me say, I’m both an outspoken proponent of effective altruism, and I think that is just one of many lenses that we can use to view the world. So effective altruism is really good for thinking about long term social impact and cost effectiveness of these things. But also there are things social justice activism, which is really good for thinking about power structures and about privilege over time. There’s other things systems thinking that’s another really good lens where you can view how the world how things co-evolved with each other. So I guess just to say, effective altruism is one lens to view the world and it is a powerful one, but it’s not my only lens. The way that I think about it for listeners is It’s essentially a mindset and a group of people who are trying to answer and think about an act on the question, how can they have the most impact in the world. And usually when they think about that, and they think about it… the birth of it was from the rationalist community in San Francisco and a philosophical PhD philosophy PhD community in Oxford. And so think about this very rational, logical way. And once you start to think about how to have that impact, then the questions that you think about are… “what should we be maximizing for? Should it be happiness? Or should it be meaning or should it be some other positive metric?” And when they start to think about maximizing for these metrics, they think from this term called consequentialism, which is where they think about the outcomes of actions we have for trying to do good in the world. How should you measure good? Well, let’s measure it based off the outcomes and the consequences are the outcomes of the of the stuff that we do? And then once you measure the outcomes, are we thinking about happiness? Are we thinking about meaning or whatever. And then once you think about maximizing for those things, then you can start to think about who we are maximizing them for.

When you come from that perspective, you can either think, effective altruists think about something animal rights as a big cause area for them where they say, there’s 70 billion factory farmed land animals every year. So maybe we should care a lot about that. That’s a lot of, ‘bad happiness’ that’s happening. Or maybe we should think about, if we think about humans, don’t just think about the people around you. But think about, we have 7.5 billion people on earth and about 10% of them 750 million are still living in extreme poverty on less than $2 a day. And that really is an awful situation. And so, let’s think about them and how we can help them or they think about, not just humans live today and not just animals live today, but all the future people.

So you say if society, we have about their 7.5 billion people today we’ve had about 100 billion humans all together, depending on when you count. But in the future, if humanity keeps going, we’ll have hundreds of billions or trillions of humans. And so if we were to extinct ourselves or self terminate from climate change, or nuclear, weapons or whatever, then that would be sad for all those future lives that couldn’t be lived. And so let’s think about that as well. So this is to say, it is a mindset that thinks about consequences and how to have a positive impact in the world. And depending on your view on it, you can optimize for different things within that framework. Let me say one final bit on that, which is the most crucial piece for me, is when you’re optimizing for happiness, one crucial result that you get quickly is that money has diminishing returns on happiness. For example, if I have zero dollars, and I get $1,000, that’s awesome. Now I can eat and do all these great things. If I’m one of those people and you’re living on less than $2 a day. But for myself and for you all, if we get $1,000, it’s not that big of a deal. And so studies have shown that this correlation pretty much holds true that money has diminishing returns on happiness. Happiness is logarithmic with respect to money. So essentially doubles. Every time you double money, you only get a little bit more happiness. And so for me, the way that I implement that within my life is after about $45,000, you stop getting happier when you make more money, it just really, really levels out. And so I decided to self tax myself 10 to 20% of my post tax income, so I give about $500 a month to charity and two other things every month because I have enough. I’m living in abundance, I’m drinking great coffee right now. I’m on this awesome podcast. I have a loving family, and I really can help the world in a way and it doesn’t even it doesn’t hurt my happiness at all to to self tax myself. 500 or 1000 bucks a month. In fact, it makes me more happy. And so that mindset is crucial for how I act as well.

Sebastien: That’s one of the things that I thought has always been so interesting about you. Because I think that of all the people I know, you’re probably the only person that gives that much money to charity every month. And so I’ve always found this fascinating. Now, how do you explain this to people? Because most people will say, Well, I’m living on 2-4 grand a month or something. I want to put money aside for my future. I want to buy a house I want to set money aside for my kids college or university. And that’s money that I could be putting to those uses. How do you explain that to people or how do you tackle those specific issues when half of your sort of disposable income is going to a charitable cause?

Rhys: So for me personally, obviously when I tell my parents about this, they they think I’m an idiot… “What do you mean, you should be saving for your future, saving for your kids or whatever, put money in retirement account. So I’ve definitely felt that I’ve also felt it myself personally… “Okay, how much can I really give? And do Should I do 10%? Should I do 20%? What should those numbers look like? And how much can I stress test myself there?” So I’ve definitely the nice piece is that I can empathize with folks who are dealing with that. And I think that mainly what I do when folks, push back or say, “Wait a second, this money that I have, it’s really I need it for all these little pieces of my life.” I mostly say, Yeah, totally. That’s cool. I agree with you. And I just recommend that they experiment, start with 1% or 5%. And start to think about those pieces in your life and how I think for a lot of folks, it depends on how people do their budgeting, but really, you get into spreadsheets and you think about how the money that they have and what percentage is going to each of these different things for them to think about their… essentially, the bonus money that they have, or ways to create bonus money, and causes. I think part of it is understanding that self perspective and how to create the toughness or the abundance in yourself. And part of it’s also getting really excited about the impact you can have.

There’s a lot of examples of this. But you can essentially pay 10 or 15 bucks to carbon offset your emissions for a full year. So I get really excited about that, you can pay 30 bucks a month to give someone a universal basic income in rural Kenya with this thing called give directly. So I get really excited about that. So there’s things or just giving random people money on the internet, I just went on Craigslist and gave somebody 120 bucks. And so there’s, that stuff feels really good. So I think it’s partially the, getting people to start to reflect on their own abundance and enoughness, and it’s starting to think about the impact they can have and getting excited about that. And when you can combine those two things together, you can make this shift. But I will say, I do think that this shift from scarcity to abundance, especially around money is one that us all as a society need to deeply deeply make. It is going to be very difficult because for the last, definitely the last 300 years we’ve we’ve been in and more generally speaking, we’ve definitely been in this self facing individual win lose greed mindset. And it made sense for a long time because only up until recently, was it the case that you could actively self tax yourself and not change your happiness at all. If I tried this 300 years ago, it would not work. But you can try it now. So I think it’s small things, it’s little conversations with people and meeting them where they’re at.

Sebastien: Now, do you think that the money that you’re giving to charity could be are you looking also at ways that you can optimize the way that that money impacts? Those people say, for example, investing that money in some sort of a fund where the end result is that you end up having more money that you could give to those charities, or what are some ways that as a donor, you can optimize on the amount That you’re giving?

Rhys: Yeah, good question. So I think there are two perspectives that effective altruists bring to this. One is there’s the “cause selection” level. And what that means is based it’s that that pro con that I gave earlier, oh, should you care about animal rights and help the 70 billion factory farm land animals? Or should you care about global health and help the 750 billion people in extreme poverty? Or should you help the long term future and, try to mitigate existential risks to humanity. And so you can optimize from that level and say, which of these do i think is the most important do I most care about and then start to give to that, cause and then once you start to give within a cause, then you can do what’s called cost effectiveness in that cause. For example, if I were to try to give to something… if I’m trying to help with global health, then it I should probably not give to my brother or to my local art place, around town, or even to in general to folks in developed countries where and that’s a difficult thing here. But the amount of impact you can have for folks in developed countries versus developing countries is huge. Almost 100x difference. And so you should, this cost effectiveness piece is choosing between the charities and which ones have had the most impact compared to other ones. So those are the two big optimizing vectors that you can look at. And then I guess, on this question of, should you invest your money and give more later? Or should you just give money now is always an open question… and I haven’t, it’s funny, because you know the answer to that. I’ve seen a variety of people, the debates on each side of this, I think that for me, I pretty much fall on the just give it straight now perspective, because I’m not doing the investing side, I already do the investing side and in addition to that, giving the money… I really think about as… giving you the money to people now and then that has massive… it’s very difficult to to judge the impact of the money that you would give to someone this universal basic income now versus being able to wait a bit and then give it later. And I think that because all of us are over indexed on investing and then maybe later once you have a bunch of money or whatever, then giving it… I essentially try to over index the other way and try to give now instead of giving later. I recognize that’s not a very powerful answer that and I’ll look more deeply into it.

Friederike: I do get that because I think basically, when you when you put things off, often you tend to not do them in the end. So I think basically, doing it now is a good way of doing it at all. I’m just wondering in us how much giving someone UBI via give direct, for instance, is better than taking the same money and supporting someone who makes a promise to change the structures of how society works, in that everyone is guaranteed a basic income for instance. So basically in is how much it’s worth just fighting the symptoms, and how much we should actually look at the root cause of things and try to treat that, obviously., that’s a long shot. And giving someone $15 a month is a good start. And basically, weighing these options against one another, I think is really, really difficult. But of course, basically, that shouldn’t paralyze you and lead you to not give anything, which I think it does actually do for many people.

Rhys: I think that’s a great question, though. And I and I think one note is that these kinds of questions are the exact questions that the effective altruists, community engages with, and they engage with it in a very rational way of okay, let’s, think about the consequences of these two things, let’s make some expected value calculations, etc, etc, and determine which one would be better so that that question is is right in line with all of that, and I think to hope to not be paralyzed with it is definitely true. I know for me That difference? Yeah, it’s a question of systemic, dealing with the root causes or versus, dealing with the symptoms. And I think that you can see this balance with something climate change and effective altruism, this balance is talked about a lot. And some of the most impactful charities that they have, they don’t actually plant trees for carbon offsets. What they do is this macro political work. This one called coalition of rain force nations. And what it does is it protects rain forests more generally, but doesn’t actually plant trees. But effective altruism has found it to be super, super impactful, because it does some of that more macro political, systemic work. So that’s an open question for sure. And I just personally love to give directly one because it’s a to, when you compare give directly to some other pieces, it’s still surprisingly effective. And it just feels so nice to just be able to give someone it’s an easy, really easy story to tell where you’re just I’m just giving this person money, and it makes them happier. It makes me happier. It’s a win win scenario and I agree I could think about some more macro systemic stuff, but I just really love the story of give directly.

Sebastien: Okay, that’s really fascinating. Let’s switch gears a little bit, we want to spend some time on your blockchain ethics course. But first, I think it’s worth spending a little bit time on what’s happening at the Media Lab at the moment. So, yeah, can you break down? what’s been going on over the last two, three months and how it’s affected The DCI?

Rhys: Let me say before I say anything here is that this is a little bit whenever dealing with some of these very hot topic issues, especially over something a podcast. It’s scary. And so I just want to be vulnerable about that for a second, which is that, I’m going to continue to speak words in these next couple minutes. And if I speak the wrong words, then who knows, maybe the Twitter mobs will be after me. And so I say that in a funny way, but it’s also pretty serious or it’s when you deal with these very hot topic. issues, it can be a little bit scary. So I just wanted to share that. So for the listeners, what’s been happening at the Media Lab is, if you haven’t been aware, there’s been, there’s this person Jeffrey Epstein, who recently killed himself in jail. And he is a person who is a sex trafficker and a pedophile and has been doing that for a long time. And in America, he was also very connected to essentially a lots of elite billionaires and philanthropists and academia. And his ties to that world have been coming out more and more over time. And more recently, those ties were very explicitly seen with the MIT Media Lab, and with the director of the Media Lab, Joey Ito. And those ties were essentially Epstein giving money to the Media Lab and giving money to Joe Ito’s venture capital funds. And so when all that came out, and especially when there is this New Yorker article about how Epstein’s Philanthropy was seen within the Media Lab and it was a pretty negative article. Joey resigned from the Media Lab.

There are both macro-systemic or bureaucratic, but also community led processes happening within the Media Lab to, to heal the Media Lab and to find a new director, and also within MIT more generally around how they should think about funders and fundraising. So that’s how what has been happening and specifically for the DCI, it’s funny because it doesn’t affect us that much. It is it was definitely jarring. And I think that, for us, part of it is legal for me. Part of is just a a beautiful, beautiful is not the right word here, but once this Epstein stuff starts to become news, then I was… I hadn’t really looked that deeply into it. And so I read the there’s this Miami Herald article, which was a whistleblower article about Epstein’s child pedophilia ring in in Florida. And whenever talking about any of this Epstein stuff… really thinking about the victims there is so crucial and I think reading, if anybody hasn’t, if you’ve been reading this article, just type in Miami Herald Epstein. It’s a long article, but it’s really, it’s very well done and it’s really sad and awful to see what Epstein did to these girls. It’s it’s girls between the ages of 13 and 17, who are really poor and you’d offer them very small sums of money 100 bucks 200 bucks to come to Him and to give him massages into sexual favors and to bring other girls into the mix. And and then the when all of this was found out about the the US government, the legal system essentially treated Epstein as a as a plutocrat and didn’t give him a serious sentence.

It’s both a despicable act of Epstein, and the legal system, and It’s awful to see what was done and to hear what was done for for these victims of sexual assault. And so I talked about that because when I think about the impact on DCI, part of its just re-engaging more of that world and thinking more and revitalizing our mission towards, changing money and transparency for the public good. And thinking about this as a good example of that, and thinking of this as a manifestation of plutocratic billionaire, late stage capitalism and of a patriarchal misogynistic society, and how those are the things we’re trying to fight. And so the DCI was also impacted with by it emotionally, but also more than anything, we’re just continuing to try to do impactful work. And so that’s the various research and education and ecosystem initiatives that that we have. So hasn’t affected us too deeply. But all those reinvigoration of the mission and emotional taking a step back. We’re definitely part of it.

Friederike: Jeffrey Epstein had given to the MIT for a long time, and had been blacklisted from giving to the MIT at a certain point after I think this, this trial in New York happened where he was convicted. But given the very lenient sentence, MIT Media Lab continue to take money from Epstein, basically earmarking his funds as anonymous donations. So do you think the Media Lab can emerge from this on the other side? And does the future of the Media Lab look like?

Rhys: Well, let me say and I don’t think we need to get too deep into… and I really I don’t know that much about it. The blacklisting i think is a hum, from my understanding of the of the two articles I read. That are these are just public articles, The New Yorker article, which talked about how Epstein was a not blacklisted but they could note people in the MIT database about the it wasn’t blacklist was called, certain giver was, noted as, not wanted or something. But actually that wasn’t a blacklist that was just Hey, we tried to hit this person up for money three times and they didn’t respond. And so there was no notion I think there will be a notion now of what blacklist look in these databases. But as far as I understand, at least at the time, that that was it wasn’t Epstein was blacklisted from the MIT perspective, but rather he was saw, I wish I could remember the term… he was called a donor that they tried to hit up for money, but did not give them money initially, any case is to say, How can the media lab… So those are just the logistics of how academia operates and how donors operate with that.

I think the Media Lab specifically, how it will resolve this is going to be Yeah, it’s going to be a process., I think there’s a lot of strength. The real question, I think, for folks is, is a classic exit versus voice question that anybody can ask with. Any system that they’re in and say, Hey, when something bad happens in the system? Do I want to express voice within the system? Or do I want to exit the system to do I want to help? The question for folks is they want to help govern and create a new awesome Media Lab? Or do they want to exit the Media Lab and go to do things in other places. And I think that more than anything, what I’ve seen is that there is a lot of long term people who are in it for the long term here and in into the long term strength of the Media Lab. And so there’s a lot of you could think of them as either bureaucratic processes or community led processes that are happening now. There’s an executive committee of five folks, there’s a bunch of different working groups that are happening around funding transparency, and, gender and identity at the Media Lab and things that. And I think that those processes will essentially run for the next, six to 24 months and then likely still continue after that. And so we’re in that stage now of people working through and having lots and lots of conversations, when I think from a very abstract long term perspective, what will happen with the Media Lab? In general, I would be very surprised if it went away, it is a place with $80 million of annual funding with scientists from all around the world and a bunch of students and a bunch of companies that that support it. And so I’d be surprised if it went away, though, I definitely think that this will be a time a little bit of a time of contraction and a reevaluation of of its goals and its mission and things that. I think more than anything, we’ll see who the next executive director is, I think that will be the big part of the Media Labs future mission.

Friederike: Thank you for that answer. It’s good to hear the inside perspective. So let’s switch gears a little bit. your subject matter expertise is blockchain ethics. And you’re teaching a course on blockchain ethics at the Media Lab. And we want to dig into the nitty gritty of this in a bit but maybe before we embark on this conversation, and it would be super helpful to properly define The term ethics and especially offset as offset it from the term morals. Since these two terms are often used interchangeably, would you be able to do that for us?

Rhys: Yeah, so I think I agree that the term ethics is a semantically overloaded term. And this it’s unfortunate in that way, and I think that’s something blockchain ethics. The main reason why I use the term ethics to talk about blockchain ethics is because it is from the field of tech ethics and AI ethics and things that. And it was just when thinking about, the goal of something blockchain ethics is a is a group of people in a movement in a field aligned around how to positively shape this technology. And that thing, doesn’t need to be called blockchain ethics. Not really, I wish it was called something the impact of crypto economic systems or something that are positively shaping the impact of crypto economic systems. But that’s that would not get traction essentially. And so you have to put it in the field of tech ethics more generally. That’s my first answer is just from a semantic… meme perspective, you have to fit with tech ethics and AI ethics and therefore blockchain ethics.

The other piece here is, the philosophical academic underpinnings of the field of ethics, I guess I’d make three differentiations. The first is ethics versus morals. Generally speaking, people think about ethics as an external thing where society is saying, Okay, what does society say are the good external things to do versus morals, which are moral, economic, the internal good things to do? But I actually think that that framing is not as quite as helpful as thinking about ethics in the field of what’s called normative ethics, which is what should we do in the world? It’s this question of should, versus something science is really good at, determining is questions. So it’s is questions versus odd questions or is questions versus should questions.

Within normative ethics? What should we do? They’re three big types. One of them in this connects back to the effective altruist piece. One of them is consequentialism, where what should we do? We should do the thing that maximizes impact. This is a very utilitarian mindset. And utilitarianism is a sub field, or sub idea within consequentialism. So there’s consequentialism, and then there’s deontology. And then there’s virtue ethics. Virtue ethics and deontology, you could map them on to morals if you want to, they’re more internal things. virtue ethics is thinking about what are the virtues that I want to do in society… so that’s… I want to be honest, or I want to be compassionate or whatever. And so thinking about the outcomes of your actions, you think about, doing these really good processes or the doing the actions rather than the outcomes. Think about the virtues and then the final piece here. Deontology, which is thinking about laws and thinking about, okay, what is good is actually, how I, conform to these, norms or laws of society. So those are the three big buckets that I put it into for normative ethics and how that relates to morals more generally. Does that help?

Sebastien: Yeah, that really helps to frame this discussion. Talk about your block-chain ethics class, what did you want to do this?

Rhys: Yeah, I think, the deep underlying reason for why I wanted to do it was, just I think has, both of you believe when you see something this technology, and you say, oh, okay, you have a lot of people rewriting how money works. That could be very impactful on society. And when you see that, how do we want to positively shape this thing? And, and so I think that when you start to think in those ways.. if you blockchains going to have ebrn 10% of the internet’s impact, we should take great care in proactively developing it when you start to think from that perspective. So say…. what already exists around New, the proactive development of this field and positively shaping it. And the issue right now is that, to some extent, something AI ethics has a really robust mature ecosystem of AI ethics centers. If you think 10 or 15 years ago, there almost none of these centers around the world. There was zero dollars in funding-ish. But now there’s, hundreds or hundreds of millions of dollars in funding, and there are, dozens of centers around the world that focused on ethics. And I really expect something similar to happen with blockchain and blockchain ethics over the next 10 or 15 years. And so this is really just kick starting that conversation and starting to build this new field of tech ethics specifically around blockchain and and trying to positively shape that so it’s the reason why I do it is because I think this could be a very impactful technology and I want to make sure that there’s a a civil society nonprofit academic movement that is contributing to the positive shaping of it, in addition to companies and governments.

Friederike: So technologists themselves often tend to shy away from these fundamental questions to which there isn’t one right answer… the mushy questions, if you will. And so how should we deal with this? And should there be an ethics committee? Or should people from within this space aim to self regulate? Or what what’s the structure that you propose?

Rhys: For me personally, the structure that I propose, I almost always come from the meta framework level with these things and don’t want to necessarily propose any specific structures. There’s this person, Lawrence Lessig, who has this thing called pathetic dot theorem. And he taught theory and it came up when he was thinking about the Creative Commons in the early internet and When you’re thinking about how to shape something, and how something is being shaped, you can think about how it’s being changed through the code itself. what actual code have we put into our, crypto wallets, or, the exchanges or things that, or smart contracts? Then you can also shape things by saying, Okay, let’s use market. So it’s change the incentive system here. Or you can, shake things by using the law itself and saying, okay, we want to use make something illegal or not illegal, or you can change things using norms, where you shame people for doing something bad and give people praise for doing something good. And so I think that I think about ethics committees and things that. I think that there will be, we will see people try to use each of those four different categories in order to positively shape this technology. And I think that the way that I think about it is you already have governments to some extent doing the law side of things you already have native to blockchain cryptocurrency. You already have the incentives and code base side of things. And I think that really trying to amplify the self regulatory norm piece will be the is probably the piece that’s the least well defined right now. And the piece that could use the most emphasis, I think all those pieces will be part of shaping this. And that will look centers around the world. And, both, blockchain ethics centers around the world that are focused on this and focused on researching these kinds of things. It will look committees at the, the state, level at the government level that are looking into these things, and it will look possibly within these new protocol networks, people who are specifically focused on the long term impact of this, just people Salesforce or Google have ethics boards and things that.

Friederike: So do you think that the ethics process and blockchain will be fundamentally the same as saying AI or biotechnology or geoengineering? Because one of the hallmarks of blockchain technology that’s always been touted is that in principle, it’s and sensible. Right? So basically, that’s not true for any of these these other technologies. So would you say that blockchain in that respect is fundamentally different? Or is it just another emerging technology that needs to be thought about in terms of consequences and what we want for it and what we don’t want?

Rhys: Yeah, that’s a great question. I think. So I would say definitely different is my high level answer. And you there could have two different ways to answer your question there. The first is, so I was I’ve been talking about this thus far as a new field of tech ethics. I think that that’s true. And that obviously blockchain cryptocurrency technology is all about the technology and it’s this new digital technology. But you could also think about it as a new in the field of financial ethics, because it is money in and of itself. And so, when you come from the field of finance, you have a whole different set of questions that come up things macros to Dimmick stability of the financial system or investor regulation or, protecting against illicit transactions, things that. Or you can think of it from an institutional perspective. And so this is this field of what’s called New institutional economics. And Ronald Coase and the theory of the firm, which is thinking about these new kinds of… In 1937, Ronald Coase was asking questions around, why do firms exist? And markets exist? Why do both of those coordinating and motivating institutions exist? And it came down to transaction costs and things like that. So you can think of blockchain cryptocurrency networks as a new institution just the internet aggregators Google, Amazon, Facebook were new kinds of institutions. Just when the nation state the first, nation states started that it was a new institution.

I think that that’s one huge difference between blockchain/crypto and something like AI ethics, is that AI ethics does not have the naturally baked in financial ethics, or the naturally baked in institutional ethic piece. Specifically to your question around censorship resistance and how that’s another key piece of this, I think that that is another key difference, which is for AI… the root goal of AI is to, I don’t know that much about AI. But in general, you’re trying to outsource the decisions to the computer, or to outsource the sense of making to the computer. That that brings up questions of unstoppability and when you should bring in humans into the loop. And so that is this question of, bringing ethics into something where you just allow the computer to do the decisions that is kind of… they’re in juxtaposition with each other. And same with something the internet where the early internet was something designed to be permissionless, designed to be as a “trustless” protocol. Trying to bring ethics into this thing that’s designed to be totally permissionless, that was still kind of in opposition to the original idea. And so I think exactly what you’re saying is true, which is a key part of the blockchain crypto world is this permissionless decentralized protocol aspect of it that has the censorship resistant money. And when you try say, oh, we’re going to bring an ethics into that. You say, Woah woah how dare you censor our thing, and bring in ethics into this when the goal is to have that not be possible within the system. So I think that’s the difference as well.

Sebastien: In the context of a blockchain network, what role you see a miner play who and affect the miners are the last line of defense, if you will, and are able to collectively censor transactions on the blockchain. Do they have any ethical obligations to do this, in your opinion?

Rhys: I think this is an awesome question. They are very connected, of course, to the censorship resistance piece. We have censorship resistance, is to some extent because of the decentralized nature of the network, and miners, not censoring transactions where they say, okay, even if this is from, XYZ, we’re going to put it, into the blockchain. And so it’s very difficult question my personal instinct is it of course it depends. If I was trying to send a bunch of money somewhere else in the world, and when that money was received in that other point in the world, it would blow up all of society, and it would blow up the earth and all the solar system and all the universe, that would be sad. And so I think that a miner at that point in time, would have the moral obligation to censor that transaction, what this is in the mem pool, but I’m not gonna, I’m not going to add that. However, that is obviously an extreme case. And so I think, in general, if I were to talk about this with lawmakers or with other folks, I would try to not have miners have much moral or legal obligation here as part of the system. I take one final piece here, which is that there’s this great book called blockchain in the law Primavera De Filippi and Aaron Wright. And what they do is they essentially, a lot of these questions have been asked before… you could ask a very similar question with Internet service providers or people that, who say, “there’s this packet going over the network, which is child porn, or there’s this packet going over the network, which is, telling people to, give us, give me money for drugs or whatever”. And so a question that was brought up then was very similar of, hey, should the people who are sending the packets over the network do they have a moral obligation to check out what those packets are and or censor them? In the end, the miners can be regulated, the packet network folks can be regulated.. we can really regulate so many different parts of the stack, whether it’s internet service providers, or the miners or the exchanges or a bunch of different pieces here. In general, I think the higher leverage points are not necessarily the miners, but rather other pieces. That’s, that’s My personal instinct to not want miners to censor transactions.

Sebastien: Yeah, I think I agree on that point, pretty much completely. So if miners are not meant to censor transactions, which other parts of the stack or service provider stack Do you think perhaps should lend themselves to be regulated?

Rhys: And so just as a note for folks what we’re diving into here, when you think about those four different parts of Lessigs pathetic thought, were really thinking about the law piece now and saying, Okay, if we want to shape positively shape this technology with law, how should we do that? And what regulations should we put on the various actors in the system? What should we determine legal and illegal? And I think that way with blockchain crypto just stuff with the Internet, and you have this big global regulatory environment and all the regulatory arbitrage that happens there. And I think that with there’s a question of who should be regulated and the question of who is regulated. And you can see that exchanges are the real leverage point that lots of law enforcement agencies have pushed, which is, of the bitwise, top 10 exchanges, I think, six of them have a bit license in New York City. And then nine of them have, whatever the other big regulatory thing is there some FATF style, Hey, we are a actual regulated cryptocurrency exchange. And so I think that the only one that doesn’t, by the way is binance, which is classic. And I do think it makes sense for there to be for exchanges themselves for a lot of them to have KYC and AML. And at the same time, I think that it makes sense for things binance to exist where if you want to exit the system and to try to not be KYC or AML to do that. And the other thing here is that this is a This cat and mouse game between, okay, Who should we regulate in the system? And then once you start to regulate it, how will the system respond to that? How will law enforcement respond to the response? And so there’s a recent, child pornography ring that was busted that was using, Bitcoin and Tor and all these things. And what you saw is that although Bitcoin has Donovan’s properties, and that they were using stuff tour, you could still law enforcement agencies and people chain houses, were able to look at the the blockchain and look at these transactions and go through these tour style mixers and say, okay, we can still determine who is actually doing this child porn ring. And so I think this is a long for me to answer question, which is, in general, I think regulating exchanges make some moderate sense. And there’s always going to be regulatory arbitrage to escape that. And when we see this cat and mouse game play out, it will be always a question of how hard the nation state governments want to clamp down on this stuff. Do they want to do 51% of tax do they want to really go deep on, you know tour in Bitcoin monitoring those questions.

Friederike: How do you feel about ZK Snarks and other privacy enabling technology in this in this context?

Rhys: I think, and we see it both with ZK snarks, but also end to end encryption, more generally on these these messenger platforms and saying, Oh boy, how should we allow him to end encryption? Should we not have these things are very difficult. I really that society has a anonymous way to transfer value around. And that’s what we’ve had for many years with something cash. And so when we go on to the internet, we have this very difficult state where you have the anonymity is going away, and you have surveillance toward authoritarianism and the ability for these companies or nation states to both, to track all of our social media things but then soon, all of our financial transactions. That’s a very scary scary state of affairs. And so I think that to keep the old status quo, which is some kinds of ability to transact anonymously, with other folks, I think that makes a lot of sense. The question, though, is it is categorically different than the way that cash used to work, which is, do we want to have this anonymous payment system? Yes. However, do we want to have an anonymous payment system where you can transact as much money as you want to anybody else in the world all anonymously? I think that’s a more open question. that doesn’t directly map on to the old status quo of cash and things that. That’s my the way I think about this question. When I think about the, the march of technologies over time, I think that more than anything, the response that I want to have is one of my answer earlier, is one of norms, where if you have these technologies that allow for bad things to happen, yes, it is possible for law enforcement and nation states to regulate them at various parts in The protocol internet protocol stack. But more than anything, I think we need to focus on regulating ourselves and making sure that, hey, we do have something ZK snarks and the ability to send money anonymously over the internet. But even if we do have that, given that power, we have this great responsibility to not use it to fund terrorist financing and things that. And so really, it all comes back to for me, as the long slow march of technology continues to happen, we as a society need to respond and turn with increased responsibility and and norms around how to use this technology effectively.

Sebastien: So you’re talking about norms and ethics are very much about forming social norms. And I think we’ve established that blockchain protocols in the context of ethics should be seen in a similar light as sort of TCP IP networks, right and the network layer is not something that, where a transaction shouldn’t be held with much scrutiny. At least not From the point of view of miners, but blockchains are just a technology., there’s many different variances of blockchains. We have Bitcoin, Ethereum, different public networks also permissioned blockchains. And I think the ethical considerations are better suited when it comes to the applications that we’re building on top of blockchain. For example, a DAO on a on a public blockchain or if some companies building an enterprise consortium settling system on Corda or you might have a funding mechanism built on some other blockchain construction, what’s the framework by which we should be applying ethics to all these different types of applications, which are very different from each other? And where the ethical considerations may be very different? Is there a one size fits all framework or, or should we should every one of these sort of sub groups They’re sub communities or whatever you want to call it have their own ethics.

Rhys: That’s a good question. So let me say, I guess a couple things. One is I directionally agree with you that building out the protocol layer versus the application layer, that generally speaking, ethics should come more into play at the application layer than the protocol layer. I also agree with you to say it’s just so a whole bunch of different things in blockchain ethics. And so it would be nice if there’s a one size fits all framework. And my response to that is my meta one size fits all framework is giving people the tools with which they can make their own ethical choices to say, hey, let’s a start by being self aware of these things, and be able to, counteract an imbalance, consequentialist ethics versus something like virtue ethics. And then as they start to think in that way, then say, Okay, let’s say we’ve determined there are some good or bad things about the systems. How should we affect that should we affect it? back to classic start with norms or law or markets or code or whatever. So just giving people those frameworks with which to view the world, I think is the most important piece, who and I think about the actual when people start to say Hey, I’m a developer, should I build this thing or not? I think the most important thing is probably what people are already doing, which is saying, hey, when I’m building this thing, who am I building it for? What is the value that I’m trying to create? Who’s the internal team that’s trying to create this thing? Do we have, lots of good voices trying to produce and create this this new technology? And once you start to think about hey, what value are we creating for the world? Then you can say, Okay, well, how would people weaponize this technology? What could be used for and other senses? So I think just thinking through those things that people are probably already thinking about, which is how do you create value for this? And then what does this thing also enable long term? I think, asking those two questions are the the best first start to this and that will give you a long way down the road of how should you build the thing or not? Or can you make changes to the things such that it would be more or less positive for society.

Friederike: So if I were to build something where I thought, well, this is tremendously useful for a set of people. So let’s say for instance, it’s super useful for whistleblowers and journalists and all of these other people, but at the same time, it could potentially be used by people for things that I don’t agree with. So whatever it may be terrorism, or pornography, or human trafficking, or whatever, doesn’t really matter. So what would I then do, ideally? So I think my point is, that almost everything can be used for good or for evil. So for as the creator of that technology, what exactly is my bad and what exactly do I have to evaluate and how do I make make a decision based on that?

Rhys: So what I would say is, I personally don’t really agree with the idea that technology is not good or bad, it’s purely just this neutral thing. I think that technology can be used for good or bad things. But I think that certain kinds of technology are more can be used for have natural inclinations towards good or have natural inclinations towards bad. For example, it’s if I’m thinking about things that can, I was just debating this with someone else last night, it’s we were talking about how much a hammer allows one to kill other people versus how much a gun allows one to kill other people. And it’s you could say that they’re both just technologies and throw up your hands, say, what, hammer and gun both the same. It’s not, the technology that kills people. It’s the people who kill people, and we can’t really control it. Or you could say, what, it is different that something a nuclear bomb is different than a hammer is different than an AK47 is different than a hunting rifle. And so, I think part of it if you’re building the technology that you talked about there, I think that part of it is of asking that question and saying, okay, is this thing more and I would come from a consequentialist perspective, which is one where you pro con, the positive that you think you’ll create with versus the negative. And if you create something, and think, this looks it’s only going to be used for people to do terrorist financing or whatever, child trafficking, maybe don’t build it. But if you’re building something that you think and you’re going to try to share it with the whistleblower community, you’re going to put things in place that make it so it’s something secure drop, which a lot of whistleblowers use is very technical and hard to use and things that. And so you say, okay, maybe I’ll try to do things this, that will make it more difficult that will make it may be easier for some folks to use than others. And so I think, my answer is, again, no answer, but technology is not totally neutral. Things have positive and negative inclinations, when you start to build it, evaluate what you think the positive impact will be versus what the negative impact will be, because it will definitely be both. And then if it’s going to be mostly positive impacts, then try say, Okay, how do we re emphasize those positive impacts, share with those communities that I think will be positive and try to mitigate those other communities and how they may use it for negative means interesting?

Friederike: I’d to zoom out a little bit from here. So from inside the blockchain community, it’s very easy to feel that this is the greatest technological advancement more or less since the internet. As someone with more of a bird’s eye perspective, do you think there’s a chance that blockchain is going to go away or maybe not go away completely, but find its niche and then just be stuck in that niche forever without causing a major paradigm shift in how society works and how the future of humanity is going to be shaped out?

Rhys: Yeah, definitely from within the ecosystem, it often looks whoa, you have a bunch of smart people who are working on building a lot of underlying protocols here this is going to be really impactful. And it’s still a very small piece. If you think about the total, cryptocurrency market cap, about 200 billion, that’s still gold is about 8 trillion. So it’s still 40x less than gold. And so we’re still at the very beginning stages here. The other question is back to Sebastian’s question from earlier what do we define as blockchain do you define blockchain as purely these new permissionless style networks, something like Bitcoin and censorship resistant money. or new smart contract networks? Or do we define it in addition as these permissioned validator set networks, where you have these permissioned validator sets in the enterprise blockchain world, or do we also define it as this investigatory piece with FinTech more generally, to say, hey, existing financial system, hey, central bankers, you should you should think about these things more, and you should implement some of the things that we’re doing in your central bank, digital currencies and things that. And so I think depending on which level you look at it from, it will have different amounts of impact, or how you define blockchain, it will have different mounts of impact.

My general instinct is that it will not be a small evolutionary niche. And I think that that’s true for a variety of reasons, but I think perhaps the most important of which is a it has catalyzed the more general banking and financial ecosystem more generally, I think that that should be thought of as part of blockchains impact, and those I think will be large. And then second, that gets into another long conversation that we don’t necessarily need to have. But blockchain cryptocurrency technology, you can think of it as this anti fragile, non violent protest, where you had this small community in this white paper that was produced to make this magic internet money, 10 years ago with Bitcoin. And now you have this whole ecosystem of folks who are really excited to exit our current state of late stage capitalism and to build this new parallel world where they change how money works, and how we should think about institutions. People are more bought into that world of, Bitcoin and ethereum then they are bought into old nation states. And so I think that when you have this new system that’s being built of an evolutionary niche that has money naturally baked into it, what that allows for that new, nonviolent movement to do is it allows it to propagate through time more easily. And unlike some of these things peer to peer, encrypted communication which didn’t have money baked into it naturally, something blockchain cryptocurrency there’s too much money in the ecosystem. And that allows the evolutionary being that is blockchain as an institution to continue to survive and compete versus existing institutions, and to be very strong at battling them.

Friederike: Well, that’s super interesting. Would you be able to expand on the role of nation states in the context of the future of blockchain?

Rhys: So I think that the role of nation states will be a couple. One will be their continued existing attempts to regulate a global world and be the primary institution in a global world and to get people excited by them. And you can see that battle happening with nation states versus these new Internet aggregators Google, Amazon, Facebook, whatever, to how nation states are continuing to their own demise essentially or how they work through their own demise I think will be one piece and if they demise more quickly then more people will exit to things blockchain cryptocurrency networks or, you know other kinds of institutions that motivate people religion or whatever. So that’s one piece. I think the other piece is how nation states are connected to their central banking systems and how those central banking systems both think about blockchain cryptocurrency technology, but more importantly at this point again, blockchain and crypto currencies are very small in the macro scheme of things for how much money they have and how much volume they have. And so it’s really a question of how they implement and start to do experiment with things central bank digital currencies, and how those CO evolved with with permission lyst blockchain networks. So that’s one other piece here. And then the third piece is Yeah, how, as they’re starting to both lose their power and as they are Starting to evaluate these new networks and start to think about regulating them. It’s all these questions that we talked about, through the show of how should nation states want to still have these great public policy goals of hey, let’s try to mitigate the amount of terrorist financing or child porn or whatever that happens with these new technologies. And so I think how they regulate that it will be the third big axis of, of interaction between nation states and blockchain networks. Does that answer your question?

Friederike: Yeah, I think we could talk about this for hours. But at some point, we have to get to the end, unfortunately.

Rhys: Sleep and eat food and those kinds of things.

Sebastien: So tell us about this. What have you learned since starting this this course? And what’s the future for this class?

Rhys: Yeah, good question. So the class is it’s about 15 to 20 students, mostly folks at MIT, but also folks at Harvard, mostly computer scientist folks, but also we got the policymakers and designers and city planners and things that too. And mostly graduate students, 60 years, computer science PhDs, but also undergrads. So it’s a wide variety of folks in the class. And I think that, what I’ve personally learned a I’ve learned a lot of things about teaching, just selfishly personally, that has been a great piece of this. I’ve done a good amount of teaching in my past, but never within a an explicit, university setting. It’s very difficult to teach this class because a blockchain cryptocurrency technology is very complex subject, and be taking a very complex thing and then trying to understand how that thing will actually impact society is even more complex. And especially it’s difficult because it hasn’t been done before. So there aren’t, there’s no field of blockchain ethics where I can just take existing syllabi or whatever. as far as I know, this is the first blockchain ethics class, to be clear to myself and my boss and director the DCI nae Honda ruler or teacher. It was great to have her input as well, especially around a lot of the technical things. She’s a distributed systems PhD, and all these great things.

I think that that’s been a learning for myself is, just as I’ve been teaching and trying to teach this very new thing. And let me say one final piece on that new thing. Although this is technically the first blockchain ethics class, there are lots of blockchain in law classes, and they deal with a lot of these similar issues. And what I would say personally, for things I’ve learned are just, it’s been very helpful for me to take these loose ideas that I’ve had before around how to think about this stuff, and to categorize it and scaffold it in more explicit ways. And then part of it’s also been my own learning for these things. So one quick specific example of this is, when you think about financial ethics, there’s a question of how should one think about financial ethics? And we are lucky to have you one of the DCI advisors is this guy, Gary Gensler, who is the chairman of the FTC and he spoke at the Libra hearings, and things that and he was just able to provide me with Hey, here’s how we think about, financial regulation and the public policy goals there. And, and so being able to think through those things with experts, and then to try to teach those to the students and get a good feedback loop with them has been really, really helpful.

Friederike: Is the content of this class available to folks outside of Harvard and MIT?

Rhys: Definitely, yeah. The class is really one specific implementation of the more macro goal, which is build the field of blockchain ethics, and make it the case that, there are lots of people in civil society who are actively thinking about how to positively shape this stuff. And so this is just one implementation, and I hope that there will be many other blockchain ethics courses or whatever in the world in the future. And so yeah, this if people go to blockchainethics.co, they can find there’s a forum there, there’s a syllabus there. And so I definitely think starting with the syllabus, it’s a long syllabus 20 or 30 pages, but there’s a lot of awesome readings and things to do. There. Eventually will upload the videos from the lectures and stuff online as well. So yeah, the goal is to be as open source as possible to help catalyze this as a field.

Sebastien: Well, it’s a fantastic initiative. And I wish you lots of luck in the future with this course. And you should definitely subscribe to this podcast gray mirror, which I’m sure you can find everywhere where one finds podcasts. And yeah, thanks for coming on the show.

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