Join us as we gather around the hedge,
where we dig into technology, business, and culture
with the finest minds in computer networking.
Hello, Tom.
Hi, Russ. You have a jacket in front
of the books now. You did that so
I couldn't see the empty spaces.
Actually, I didn't, but now that you pointed
out, yes, I did.
That is so crazy. I'm forever here.
I'm sorry. No. Go ahead. That's my my
oldest son's first suit jacket, actually. So Oh,
okay. I'm pretty proud of him. Wow. Wow.
It's a lot older than the last time
I was there.
Yeah. That should tell you that I need
to come to Austin more often and, like,
hang out and do stuff. I have no
travel budget, so it's hard. So today, we
are joined by Jamie Schwartz. Right?
Yep. Okay. And where are you physically, Jamie?
I'm in Hastings On Hudson. It's the first
small town north of New York City.
Oh, okay. Cool. So I've probably driven through
it several times.
Without even knowing it, probably. Without even knowing
it, probably.
Yeah. I used to live in,
Northwestern New Jersey,
and we would go up to the apple
orchard orchids in orchards in, Northern New York
around Halloween type stuff and go get,
It is always funny how people say, yeah.
You're you're in Upstate. I'm like, I literally
I touch Yonkers. Like, I could drive to
the city in twelve minutes. Yeah. You're Upstate.
That's Yeah. No. Yeah. Right. Right. But I'm
saying I drove through to get Upstate, probably.
Yeah. No, you are. You're probably still in
Westchester County. We go there all the time
ourselves. And I grew up in Chappaqua, which
is even closer to that. That's where the
Clintons moved to in the early 2000s, and
it just took over. But it's we had
three horse farms when I was a kid
in that town. Oh, wow. That's really cool.
Yeah. People don't realize it, but
Bronx and the Queens,
those were the names of the farms.
Like,
you know?
When my dad was born, there was still
a farm in Manhattan.
Yeah. Yeah. That's that's, like, crazy. So alright.
So we're talking about NFTs.
And,
so NFTs are an interesting area of basically
around similar to in the same realm of,
the idea of Bitcoin
or
the area of crypto based, not really currency
in this case,
but artifacts.
Right? So maybe we should start there. Like,
what is an NFT?
Where what what do we do with this
thing?
Well, the thing that combines all of that
together is the technology behind it all, which
is blockchain.
But a non fungible token, which stands for
an NFT, is a unique object. And a
fungible token is an interchangeable one like Bitcoin.
So we're really just talking about
unique products, non fungible tokens, versus
exchangeable fiat currency,
fungible tokens.
Okay.
So when you say non fungible or fungible,
you mean you can still buy or sell
an NFT. You can still change hands with
it. Right.
You can buy or sell both of them.
The thing is a fungible token is exchangeable
because it's a a dollar is a fungible
token. Yeah. If I give you a dollar
and you give me a dollar, nothing happened.
It's the exact same worth even if yours
is torn and mine isn't. But if I
have a painting,
it's a one of one. It's a unique
thing. So you'll be like, okay, what's this
worth? Whatever the market will bear. Okay. Because
something's a unique thing.
Okay.
So if we think about NFTs,
can you give us some examples of where
NFTs
are used in the real world
or the virtual world, however you wanna put
it.
Because,
you know, so what kinds of things are
people doing with NFTs?
So an NFT is just a receipt.
It isn't the media or the object itself.
It's just the unbreakable, immutable blockchain proof, crypto
proof receipt that says that thing is unique.
So it doesn't have to be for Bored
Ape, those or CryptoPunk or all those other
pieces of art that people say, okay, well,
this is a non fungible thing I can
own. If you have, anything that you buy
clothing,
high end food that has already been put
on the blockchain,
which is just a decentralized ledger,
then,
it will be a non fungible token because
it's unique. You can say that your computer,
if we both have an Intel Pentium computer
with the same exact things on it, you
say it would be fungible.
But if it's got a serial number on
it, that's a one of one. That's what
makes it non fungible.
If you can tell the difference between something
and not, and if you can't Okay. That's
what makes it non fungible. So we use
it already in a lot of different platforms.
Right. So if we go back to the
laws of logic, it's basically going,
to the law of identity.
Like, the two things can't be identical in
every respect.
There must be something that you can grab
onto and say,
this is different than that. And then what
you're doing is you're creating this non fungible
token or this NFT
that says, I am certifying that this is
the unique one of that with that set
of characteristics.
Exactly. So I can go back to money
again. If all money is, it's interchangeable. But
if you get, like, that rare one coin
that's like a misprint or something,
how do you tell it apart?
Will those unique little characteristics within it then
make it non fungible? It's just unique versus
not unique and interchangeable. Okay. But it all
just goes back to a ledger.
Banks, credit cards, those are all just ledgers,
but the banks own them. The only difference
here is it's the same ledger. It's just
decentralized. There is no centralized authority.
Okay.
So I'm trying to get, like so if
I think about this in terms of technology
purely, it's simply the blockchain is all we're
doing. We're putting out a signature
across this in some way.
Now are we incorporating
something about
the uniqueness into the signature so I can
back up and say,
I know that this is related to that?
Like, you don't have to. You don't have
to. Okay. That's one of the problems that
we've had with the first generation of NFTs
because,
the like I said, the NFT is the
receipt. So all it's doing is pointing to
a media address. So if somebody had a
Bored Ape and they went on OpenSea to
sell it, they somebody could right click that
art, make a new blockchain
and point to that
actually
copy. That's a copy of it, of a
digital thing and just say, Oh, it's over
here. And if you don't notice, and you
don't look at the little tiny
script changes in the code, then you won't
notice it's actually not the original.
So,
another way of doing that of rug pulling
is you can just take away that media
file and replace it with something else. You'd
still be buying the NFT, but what it's
pointing to is something different.
So I can use security into that source
file too.
So so this relates directly to security
in the network world in one way, in
that you have authentication,
authorization,
and, triple a and,
Accounting. Accounting. I always think logging. Logging. Right?
Logging is in my head. But anyway yeah.
So
this is really tied to the authentication piece
of it more and the
the logging piece of it or the accounting
piece of it more than anything else. Because
what you're saying is, I authenticate this to
be that,
and we have all the same problems we
have with authentication
in any other way. Now, what That used
to be all it could do. But yes,
that is a very, very strong point about
it. Okay. So what else can it do
if we were to say it does more
than that now?
So,
the OG in the whole space, Bitcoin,
when it started, this was this made up
person. We don't know if he's real or
not Satoshi,
that just wrote about this decentralized platform in
general, how decentralized
cryptography can work so you would not need
a trusted central figure. That's why we call
it trustless.
Along after that came the Talib Buterin who
created Ethereum,
which is programmable
NFTs.
So there are different versions of Ethereum, ERC
7 20 1, ERC 11 50 5. Those
are just the names of whenever something was
registered.
When seven twenty one came out, somebody added
a contract.
So now there's a program,
tiny little bitty program in the NFT,
meaning the NFT can behave
in a way we program it to.
So the first, NFT to come out of
that was at ETHDenver twenty seventeen,
CryptoKitties.
If you guys came across those. And that
said, Okay, this NFT has these qualities, and
this NFT has these qualities. And we will
allow these two NFTs to breed
and to create a derivative
where we're just like parents making a fiftyfifty
random exchange of quality characteristics
to make this baby.
So that people would now buy kitties, breed
them, create rare things. And then you have
this ecosystem of a marketplace
that grows out of that. So smart contracts
became a really, really big thing that went
on top of what, Bitcoin on itself, or
I should say what blockchain on itself could
do. Yeah. So smart contracts is an area
that I think is really interesting for us
to explore a little bit because this has
direct
impact on
the ability of companies to do business together
in a distributed way without doing banks for
clearing or anything like this. And, of course,
they can be carried over networks or, you
know, carried through the computer through computer systems.
So how is is that developing, the smart
contract concept
developing into the world where we're seeing people
do
ordinary, everyday things with smart contracts? I mean,
we've heard people, Oh, I bought this house
with Bitcoin. Well, I didn't. I'm just saying
people say they do.
Yeah. But that's not quite the same thing
as a smart contract. That's just a that's
just an exchange of monetary value. The contract
lives outside
the the blockchain.
But what you're saying is the contract in
this case is part of the blockchain.
Exactly. And it's it's a it's a shame
that it's called a smart contract because it
is not a contract. Everybody thinks contract means
a legal IP is is changing. That's a
separate thing. So if somebody buys like remember
when Seth Green bought a Bored Ape and
then somebody stole his Bored Ape and he
was trying to make a TV show with
the Bored Ape in it? So who had
the rights?
Did Yuga Labs have the rights? Did Seth
still have the rights? Did the person who
stole it and had possessorship of the NFT
have the rights? It wasn't clear.
So that's a contract thing, not a smart
contract thing. The smart contract contract could say,
you can't make a copy of me or
you can make a copy of me. That's
another derivative. Or,
I can only be opened on this day
or with this key. And there's different formulas
that do different things. And the big one
for me was, what was called ERC 6,551,
which is allowing,
a, an NFT to own its own wallet.
That's a big change right there because that
means objects can own things.
Oh, interesting. So in this case, what you
could say is you could say, I have
a smart contract that will only allow you
to access the wallet owned by that thing
by that
object
Mhmm. In the case that certain things are
fulfilled.
So you could actually Now an NFT
does need a wallet to be held, so
I still have to possess it or whatever
the creator does, but then that thing itself
can possess. Like a Russian doll. Yeah. Exactly.
But that but right. That's exactly right. You
can actually give the NFT to someone else
and say, when you fulfill the the the
terms of this contract
and the NFT, the object itself can see
that,
now you will be able to access the
wallet attached
to this. So now you get paid. Right?
So that's it. If that's one of the
programs. Yeah. Yeah. So you could program it
to actually
defer or to manage payment
based on performance
of certain things
in the in the virtual world, which is
interesting.
Yeah. If you're working with escrows, that's an
easy example. Yeah. Right. Yeah. Exactly. Escrows are
one. But I'm not just thinking of I'm
not just thinking of escrows. I'm thinking of
even bug bounties.
Right? Bug bounties are kind of escrow, but
you could do this with a bug bounty.
Right? You could say, if you can break
into this particular
software,
you will find something that allows you
to go unlock
the NFT, or the NFT will see you
do it when you reach a certain point.
And you'll you'll be able to access this
wallet. That's one of the mistakes people make
about jumping wholeheartedly into blockchain. We could do
everything we've already said
in a centralized way. We would just need
centralized, trusted systems in order to make that
happen. This could now all be done in
an automatic way where we can all trust
the system. And I want to use that
word very lightly because all blockchain does is
create trust within the chain. Right. When you're
minting, when you're exchanging,
it's it's a no holds barred. There's no
FDIC. There's no trusted centralized figures to help
you here. There's no laws.
So does this
come back into
could this come back into identity and identity
services? I'm not sure, yeah. So, so for
instance, I could imagine a system
where
today we have we have a program on
our cell phone that flips numbers for us.
You know, a two factor,
two factor authentication system.
And rather than having a two factor authentication
system, you could actually have an NFT
that says, I am who I am. I
know it. Because,
you know, for instance, there could be a
a fingerprint
embedded in the NFT that with a program
that can read a fingerprint reader of a
certain class or model. And then you could
actually put your finger on the fingerprint, and
the NFT says, yes. That's actually that person.
And you could actually prove
who a person is in that way.
You could tie by a metrics. You could.
You could. One of the things we've been
trying to do is you've seen smart rings.
Right. Where, like, you know, it's it's reading
your
Pulse or whatever. You know, it's giving yeah.
It's pure pulse and everything. It's saying, hey.
There's enough about you. We've started looking at
this as how we can use this as
biometric data. So you're not only getting your
wellness, but it's also I'm the only one
with this unique combination of this heartbeat and
this blood pressure and this body temperature, etcetera.
So that when the NFC chip that's in
here taps something, it's still checking. Am I
the one wearing this ring? Or are you
the one wearing this ring? So there's different,
gateways or blocks you can create for that
kind of stuff.
Another one being a sold down token, which
is just saying, once this is minted, you
can't exchange it. The smart contract says, you
can't exchange it, which means it's yours and
nobody else can take it from you.
Right. Which is the theft prevention and not
only theft prevention, but also IP prevention, intellectual
property.
Like it can be used. Yes. And no.
Remember, it's a you need a contract for
IP, not a smart contract.
But we we do get into that a
lot with, trying to figure out what's the
next level of of name image likeness. So
So we're calling that nail name AI image
likeness, because as we start becoming avatars and
have personal twin personalities of ourselves, what's unique
about us? What's non fungible about you?
And so what's your AI going to be
that's an, that's IP that it can hold?
And that'll get brought in also into the
name.
That's very interesting because that could totally revolutionize
zero trust in the networking world. That could
totally,
revolutionize,
all sorts of the AAA process. It could
revolutionize all of this stuff. So how far
out are we talking about
in terms of time
for those types of applications?
So in a sense, it's already here. People
talk about innovation as,
the future's already here. It's just not evenly
distributed yet.
So there's a lot of examples of of
things that have happened. Everything we've said has
happened, just hasn't happened at scale. And it
hasn't happened at an adoption level where people
even understand. Like, we're having this conversation, which
we could have had in 2017.
It's the same conversation of what the hell
is blockchain, but we're still having it because
it's really, not about the tech. It's about
the use cases and how people understand that.
Because we don't understand, you know, when we
drive through an easy pass, what's actually happening
with the NFC and the magnetism and what's
getting exchanged in a ledger. We just go,
Yeah, that, that worked. So we don't ever
have to really understand this stuff. We just
have to live in the benefit side of
it. So it's more about saying, what are
we really making? What are we really using
these things for? And in that case, you
are seeing one of the early things is,
like I said before, supply chain.
So I don't want to trust anybody in
the supply chain because of going from one
different company to another. But if they're all
on the same chain, that object is autonomous
from all of those different
companies that may have different incentives to tell
the truth or not. Because, you know, we're
all not using real olive oil. That sushi
is not the fish you think it is.
Blockchain has entered those spaces pretty early and
has been there for almost a decade.
We're seeing it in fashion more and more
now to the extent that like, you know,
NFC chips. So it's not even just the
supply chain. It's
we treat fashion like R2. It's a non
fungible token in itself.
Let's keep the chip with the end product.
And when you have that, you then add
people to the value chain. That's a whole
other conversation, but blockchain doesn't have to end
just because you've made the purchase.
Right. That's interesting because,
again, you know, when you talk about and
that when I think about
when I think about supply chain, my immediate
thing is gonna be software supply chain.
And now the problem is, I don't know,
because software itself is fungible,
people change it.
Is that an application?
Or because it's changeable,
does that make it difficult to apply? Like,
I'm thinking an open source developer or an
open source project
publishes a new version of the software, and
they put somehow an NFT on it to
verify this is, like, this is the real
release.
Right? This is really what it is. And
then this would be like having a CRC
or, you know, a cryptographic hash across it,
essentially.
But you could go one step farther, perhaps.
I just wonder what that one step farther
might happen to be here. Like, is there
an application there?
Yes. Well, first of all,
don't use fungible to mean changeable. Okay. I'm
sorry. Well, that's great. Right. But,
in and of itself, like a supply chain,
Like I said, everybody's on their own kind
of like incentive, so somebody could change something
along the way. But,
if you have this decentralized
trustless chain, that means everybody
there has automatically agreed
to work off of that chain.
So when you're
creating an exchange, when some transfer happens,
like you said before, it's not even
who's deciding what is happening. It's that the
chain is deciding.
Now, how does the chain decide? Because there's
anonymous people
that get paid through gas fees
in the system
to do a complicated math problem.
And that's what allows for the trustless.
Because there is a math problem that's sent
out to three random people across the entire
chain network. And nobody knows who's going to
get those problems.
And they all have to be done exactly
at the same time.
So because the system is so big and
so decentralized, nobody can control
the doing of the math problems,
which is what certifies whether exchange happens or
not. I don't know if that helps, but
that's why blockchain works versus,
you know, a few a few people on
one boat can exchange and say, like, yep.
That's we just changed out this fish for
this fish and nobody know knows what happened.
So it's interesting because you say at the
same time, but it's literally not at the
same time. Right? It's like No. It's across
the network. Yeah. Within a range of time.
Correct.
Not necessarily
yeah. It's not necessarily, like, at the same
moment. It's because I'm thinking CAP theorem. I'm
immediately thinking, you know, you can't you can't
actually do two things at once.
Well, it's not this two things at once.
It's that well, Ethereum calls itself a decentralized
computer. Yeah. Right. These are actions. All those
one and and zero calculations that are happening,
they're just happening across a network. Yeah. Right.
Where one hand doesn't know what the other's
doing because it's decentralized.
But we're all incentivized
to make sure those things happen because that's
how we get paid with gas fees. Right.
Yeah. Exactly.
Now so is the person
who is asking again, if I go back
to, like, an open source project and I
say I want to
certify
or I want to have an NHT,
is the open source project the people who
are paying? Somebody has to pay those people
to do that math.
So where does that
That's the gas fee, but actually it's a
good analogy to talk about open source software.
There was a huge security hack,
by a Chinese spy that had snuck into
Linux Right. Last year. And the whole way
that works is you do a lot of
tasks, you build trust over time, your trust
score goes up. You're allowed into the system.
To do what? The same thing that people
can do in a trustless way on a
decentralized blockchain. Right. So open source and blockchain
are really similar in
that you've got nodes of people who are
allowed
to make changes into the system. And you
have to do certain things in an open
source to be qualified as someone in charge
of a node versus
to be, a calculator in a system, you
just have to hold enough Bitcoin or hold
enough Ethereum,
to want to be an anonymized calculator.
Right. Right. What are the what are the
incentives to want to be an anonymized calculator?
Why do you want to use let's smile
you don't It's gas staking.
Yeah. Staking means you have enough of that
coin in the market
that you have either you can do the
proof of work, which means you have a
giant computer doing the work to make this
happen or you have proof of stake like
Ethereum and other ones where it's I have
enough of my Ethereum in here that if
I don't do the right thing, I lose
everything I staked.
Right. So your incentive to do it right,
a little bit of reward. Your incentive to
do it wrong, a huge punishment.
Right. But but this payment form you're talking
about, this, like
people run these big computers. And by the
way, none of this is cheap to run.
Well, not proof of work. Proof of stake
is 99%
cheaper computationally. Right. Right. Proof of work's the
only one that's like that. But proof of
work is expensive because you have to have
big data centers, GPUs,
or, you know, you have to have at
least a big machine with lots of GPUs
to do the physical labor of actually doing
it. You're paying for electricity.
You're paying for software maintenance, all that other
stuff. Yeah. So other than holding my value
steady,
what am I getting out of doing the
proof of work for other people?
That's why they call Bitcoin digital gold and
nothing else. It's for holding value. It's not
for transactional value. Okay. So there's a layer
two Bitcoin. Bitcoin has ordinals. Bitcoin has lightning.
There's all these different ways that they try
to fudge doing transactions.
Ethereum's a little better, but then Ethereum has
a lot of layer twos. I run on
a layer two Ethereum name chain.
But then Solana came along and they do
proof of time.
And so they got past the speed of
credit cards.
And they're the only ones that that's why
everybody gets meme coins on Solana right now.
So there's different chains doing different things that
have different specialties.
So you can look at Bitcoin as a
holder value, Ethereum as the decentralized computer,
Solana as the exchange,
platform.
So they all have their own different kinds
of functions because nothing does everything. Yeah. I
was involved in in Lightning early days and
trying to figure out how to make that
work.
Because, of course, being a network engineer, they're
always very, you know, trying to figure out
how you get the data to transfer, you
know, and how do you minimize
and stuff like that, how you use the
network efficiently.
So that that is
yeah. It's interesting to think of it in
those terms. So what you're doing is you're
saying,
I am going to go
basically
polish someone else's gold and make sure it's
real to make sure my gold holds its
value
to some degree. You're like helping someone else
validate the value they have
in order to maintain your value
is kind of a is kind of a
way of looking at it.
It is a way of looking at it.
I I think there's a lot analogies can
hold and not hold and Yeah. Of course.
Yes. Yes. I keep thinking of, like, Die
Hard three and all the gold under New
York City and how they get it out
of there. And but it's just a bank
doing you know, everybody forgets money is just
Fiat. It's it's it's not referencing anything. It's
just the trust of the government. So there's
nothing there there. It's a rarity. It's it's
it's it's a rarity. Right. And the point
is saying it's proof of work and that
how computation is stored as value. And it's
true. It's just as long as we value
computation,
which is really in and of itself, but
that's what they say. Well, that kind of
leads to the next question I was thinking
about was I read an article recently where
they were talking about there were all these
lost Bitcoin wallets
Yeah. Out there. Right? Yeah. People people own
millions of dollars or whatever it is in
Bitcoin. And some of them, they were, you
know, lots of money. And they've lost their
key.
And this actually
increases
the value of Bitcoin in a sense
because it makes it
more rare.
Right? It doesn't make it more rare. It
just makes, less liquidity in the system. Right.
Okay. So that actually could make it more
valuable,
because those are locked away for sure. But,
yeah, it's just locked away. It's not going
anywhere. Right. However,
I'll speak in terms of Web three here.
And when I say Web three, I'm gonna
talk about pillar technologies.
So the XR, Metaverse VR AR is one.
AI, generative AI, deep learning, all that is
another.
Blockchain
is another. And quantum computers, the fourth. And
they've all hit in different ways at different
times in this past decade and are keep
coming up and down. But I have a
feeling, if not this year, at least by
next year, somebody's gonna use a quantum computer
to break Bitcoin.
As soon as that happens,
Bitcoin goes to zero
and they have to quantum secure it. So
does Bitcoin get quantum secure on a decentralized
network, which is a DAO? Everybody has to
decide to do this. That's a giant fork.
Once that happens, it'll be secured from quantum.
But then we'll be in a quantum world
and we can take advantage of quantum plus
blockchain plus AI plus XR. And oh, my
God, that's a lot. But we have to
get over that hump now too. The same
way that we're getting over all these humps
with AI right now, the same way that
the metaverse was like this beautiful
idea that just didn't come together. They all
have their own up and down things, and
they're slowly converging.
But we are gonna go through this giant
bump very, very soon. The quantum is gonna
break Bitcoin or just block it in general.
Well, it's so, actually, the the article I
was reading said something about
the first attack point, the first,
place in the attack surface that someone is
likely to try to attack Bitcoin
is not breaking the chain itself.
It's finding the keys for these lost wallets.
Right. So we don't know what the first
attack's gonna be and what it's gonna do.
If you're smart, the first thing you're gonna
do is
hack into those lost wallets, get that money,
cash out, and then break the system. Right.
Or it's just been systemally broken because you'll
see that. And that's, you know, probably what
will happen. Yeah. But whatever that is, either
way, that's zero for everybody else.
Yeah. Right. Once you've cashed out, you've zeroed
everybody else's. Right? But but, I mean, I
guess there's even a motivation there. Why would
you do it other than just for the
joy of tearing something down? You know, if
you could break the if you could break
lost wallets, you could just go through the
rest of your life just breaking wallets and
making millions and millions of dollars. And, like,
yeah. You know, it's still worth something.
I'm getting mine. There's two reasons
that you break the law that come to
mind for this. One is profit. Like I
said, somebody's gonna take that wallet, cash it
out. That's enough incentive right there. There's billions,
billions
ready to be taken. And as long as
soon as it turns into cash,
it's cash.
And the other one is anonymous isn't pro
crypto. There's a lot of white hat, white
hat hackers, not to mention black hat hackers,
that don't want crypto in the system.
And as soon as that happens, they blockchains.
Yeah. They don't like blockchain. Right. And there's
actually government actors, I would assume. I mean,
I can imagine a situation
where
some government, we won't you know, it could
be any government in the world that's large
enough to do this, could build their own
blockchain
and then say, oh, we don't like competition.
Let's go out and kill all the other
blockchains so that we're the only one left.
Theirs is crypto secure. Yeah. Right. Exactly. Yes.
So there's so there's actually a danger there,
I think, too. Whoever
gets the gets the quantum gets past the
quantum problem first
becomes, you know, the most valuable
and everybody would shift to it probably because
they are quantum safe. Right? Yeah. And there's
the government has already or at least our
government has already said, we need every single
database to be quantum secure.
And that's a non Blockchain point. That's just
Yeah. Right. Yeah. Quantity to do anything. So
they make them quantum secure.
The Blockchain side, because it's decentralized,
you have to fork, you have to create
Yeah.
Over 50% of the entire chain saying yes
to something.
Mhmm. It's happened a few rare times early
on in each of these chains' existence, but
that's it. Right. Right. So it's a big
thing that's gonna have to happen.
It's very interesting. Yeah. And and another piece
about quantum is I wonder how this would
impact things, is that when you get quantum
entanglement, and they've been playing with this on
network side for a long time, you can
actually
defy
not the speed of light, but you can
defy
the transmission time
between two locations.
Right?
Does that have any potential to impact the
way we do
blockchains?
If I had two computers
connected together, they could actually, at the same
time, instantaneously
compute
the same blockchain result.
So although that's a truth,
a superposition is a truth of quantum. Quantum
computers use superpositioning
to create a third state, not to be
two separate places at the same time. Because
of that definition, you get one zero in
both, which
automatically goes from two possibilities, three possibilities
of calculations. And that's what does Quantum's,
you know, amazing logarithmically
sized different computation.
To to separate
your one and your zero to create a
superposition in different places,
That's not what quantum's built on top of.
Well, but we wanted people to do that.
We're actually seeing people do that. Sure. That's
just not quantum computing. That's
superposition,
play or quantum entanglement play. So we've seen
people,
I forget how far the distance is now,
but, yeah, something instantaneously changed in one place
over another, which is faster than the speed
of light if you think about it in
terms of time. Right. Quantum doesn't deal with
time, and Right. That's why the superposition is
working. Exactly. Yeah. So that's another interesting development
to be to be careful. How far do
you think we are from Quantum being able
to break
the blockchain? Like I said, it's this year
or next. So, like,
Mark,
Mark's CTO is Matt Hampton, and Matt Hampton
of Envoy Design has access to three different
quantum computers right now. And right now they're
working on a couple of things. One of
them is just,
generative AI. What happens if you hook up,
they downloaded their own deep seek because it's
open source and threw it onto one of
their quantum computers.
And it
is
Quantum computers do not work the same way
as a regular computer.
So they're ground up trying to figure this
out. So far they've gotten to making like
polka dots and diagonal lines. Of course. In
and of itself. That should be in like
journals. It's huge that they've done that. But
we look at it, we're like, it's a
dot. I'm like, yeah, it's a quantum computer
that did that. So,
like, we don't know what that really means,
but it's it's a huge thing. Yeah.
Interesting.
Yeah.
Large language models
mixed up with quantum might be a very
interesting
thing that's going to happen. And when it
happens, who knows how that's gonna play out?
You know? Yeah. That's like I I spent
fifteen years in advertising. I really think from
a market perspective, and it's really about the
benefits, not the products. Right. You've got to
look at these things as, like, what are
they? So going back to art and NFTs,
I think of an NFT as a story
basket. It just allows physical objects to hold
story.
That's a huge deal in and of itself,
and you can remake economies around that.
But it's also just that's English. That's just
plain English. Oh, I can you know, this,
this,
this painting behind me right there, that's Albert
Einstein on the boat from, London to New
York in 1942. That went from my great
aunt to my grandmother, to my mother, to
me. That's an oral tradition. We all do
this with art. Right? But now if the
art can do that itself,
so it doesn't need me anymore to do
that. And now do that across all real
world asset tokenization.
Yeah.
Like I said, the assembly line never has
to end. Value add can keep happening with
story. We can all be co creators in
a co creator economy. We could leave late
stage consumerism behind, and enter early stage prosumerism,
producer consumerism, just by that technology.
So that's culture, not technology. Yeah. Yeah. Yeah.
Yeah. No. But that's but it is true.
And that is I mean, I just happened
to be reading
Progress and its, Progress
and Its Detractors or something like that, an
interesting book about progressivism and stuff like that.
And, also, I don't know if you've ever
read The Lonely Crowd,
which is an interesting book. It's a very
interesting book from, I would say, the 1940s
and 1950s. It's a very interesting book about,
consumer economy
and how the consumer economy
works in certain ways.
I enjoyed the first half of that, but
the second half of the book kind of
went
off in the weeds. Well, the way I
define
it is that, if you're a LHS
if you're a consumer,
then you define yourself
by the brands and the things you have.
You surround yourself with things and say, I
am this. That's what a conspicuous consumer is.
If you're a conspicuous prosumer,
that means you can define yourself instead of
by what surrounds you than by the legacy
that you leave behind, the objects that live
beyond you.
Right. Exactly.
Yeah. And that's part of what this was
oh, I'm sorry. The name of the book
that I'm reading right now is the the
the true and only heaven, progress and its
critics.
And it's real it's very interesting on this
score about how
the consumer based thought
the consumer based culture
loses the humanity
very quickly.
And you have to go back to a
maker economy
to
get back to
a truly human view of people, of persons.
Yeah. And we're heading and Web three is
gonna do that on the other side with
AI. If AI is taking away all the
jobs, the only thing left, because AI can't
own IP, is IP.
So the only economy that makes sense is
our originality
bought and sold.
Yeah. So how do you get that? You
have an NFT that holds it. Interesting. Interesting.
There are
arguments in both directions there. But now we're,
like, off in the weeds of culture and
Don't get me started on UBI. Which is
which is much more my PhD area than
than this than my networking world area. So
yeah.
So cool. I don't really have any more
questions or anything. Tom, do you have any
you've been very quiet, Tom. Yeah. That's that's
alright. I can be quiet sometimes.
One question it's kind of that this goes
back to fundamentals.
It when I when I thought of NFTs
before, I always thought that thought of them
as
a representation of value. Like, if you which
is which is obviously it's not just that,
you know, you hold up a dollar bill,
this this represents something. It itself is not
anything, but it what it's rep it's what
it represents
that gives it power.
So
what is the
what were the roots of NFTs? Like, what
was the first thing they did? And then
and how did that progress to other things?
Smart contracts, blah, blah, blah, all this other
stuff. Like, what was the very first thing
that that brought it into being?
So what makes the two things the same,
whether it's a dollar or a Bitcoin, is
token. It is a representation.
So
but there's a difference here. So when you're
talking about a dollar,
what makes that important is that the US
government
says it's worth a dollar.
There's a giant trusted system
that's backing it
up. With the blockchain and the proof of
work and the decentralization,
it's the system itself
and the fact that people are paying
whatever it is for that coin and the
market that that creates for all the other
coins
that determines its worth. And the fact that
only when you're able to add a block
to the chain through those proof of work
calculations, which is trustless anonymous,
does exchange happen.
Does the value exchange happen? So,
when you're talking about a Bitcoin
in terms of fiat currency,
sure.
The first,
thing there's a pizza day is how we
celebrate Bitcoin because it was the first time
there was a transaction where somebody paid,
for a pizza with 3 Bitcoin,
which was pennies at the time, but
$300,000
now.
So when it started off,
Bitcoin and blockchain
were
inseparable
because Bitcoin was the proof case of a
proof of work decentralized
network.
But as soon as that happened, we have
to recognize they're two different things. A decentralized
network
can go off and do a million different
things, and a Bitcoin is stuck being a
Bitcoin
in its own network of, holding value
using calculation to do that. So
for a few years, Bitcoin was really it.
And it was a Bitcoin Maxi, Vitalik Buterin,
I mentioned before that started Ethereum to say,
what else can we do on it? So
the first big change
was another chain. The second chain, Ethereum,
where he wanted to look at it as
the decentralized computer.
So instead of proof of work
and using the computation of value,
it's,
it was still proof of work for them
too. But the computational value was the computation.
It was saying we can build contracts. We
can have things all happen
across all our decentralized network. One giant computer
for all of us to use that nobody
runs because it's decentralized.
And that one trustless point of decentralization
is what everything is built on top of,
and it's the only universal thing with all
of these things. But it's these use cases.
Once you get into programmable NFTs and you
get out of proof of work into proof
of time, proof of stake,
there's proof of space for,
IPFS
that
say, here's all the different ways we can
use a decentralized network. And what is the
mechanism
that allows for exchange on that decentralized network?
Proof of what?
And the more proofs of you have, the
more variability you have, and the more ways
you make things, the more things you can
do with it. What we've done,
pairing up with blockchain names is we don't
build on top of a blockchain. We use
the blockchain as a taxonomy.
So the so it's a,
it's a naming system, owner
.function.creator.object.
Jamie Schwarz dot art. Leonardo da Vinci dot
Mona Lisa.
Where does that point to? It's a JSON
file that points to all of the assets
that that art owns.
So our contribution here is what we think
of as NFT two point zero is a
grouped asset NFT.
One NFT, a master NFT that doesn't just
own a lot of assets, but categorically on
specialized
NFTs.
Some of them are concentrated on various assets.
So going back to art, art shouldn't just
be a physical piece. It can be its
digital twin. It could be an immersive version.
Free artists to express the art in different
modalities and mediums, because we have different modalities
and mediums.
Rights, rights contracts being the second category.
That's contracts and smart contracts.
It's what IP does it have? What IP
is kept by other people? And how does
the NFT act on those? And then the
last category is provenance, which is that story
basket.
So So instead of showing a JPEG across
Instagram and Instagram owns all the likes and
comments, the art can hold those things and
gain that value over time. So if I
buy a piece of art and add a
thousand followers to it, it's worth more because
when I sell it, the followers go with
the art.
Interesting. Yeah. So those three assets together become
what we think of as a group asset
NFT.
Right. And and even in the provenance realm,
like, knowing that your grandmother had this adds
value for you. It may not add value
for anybody else. Right? But Right. Of course.
But but the longer it stays in your
family and the longer you can prove it
stayed in your family Mhmm. You're building value,
not just for you, but there are some
people who would want to buy that because
they want that kind of history
available to them in some way. Right? Yeah.
Yeah.
So there's a wonderful psychological experiment
as a sentimental value where a bunch of
people, a bunch of writers, bought a lot
of tchotchkes
on Craigslist
and then made up stories about them, like
a salt and pepper shaker that looked like
two, like, little Yiddish ladies or something. And
then they said, Oh, it came over from
the boat in 1890, whatever. And they did
the whole thing. And then they resold them
at thousands and thousands of times of their
original value
because people love those stories. And those objects
are just story baskets.
Right. They're the holders of the story. And
when people are buying maybe my painting, they're
buying
a story, a chain of events that went
on through time. Right. So you've explained a
little bit about what it is you're working
on.
Is there any more to say about that
that you wanna talk about before we back
up? Sure. Okay.
So this is all based on, like, how
I got into this. I filed the world's
first NFT patent back in 2017,
and it was really focused on this. How
are we going to interact with digital objects
moving forward?
And the key here that I think few
people are really getting is we really need
to be focused on anchoring digital and physical
goods together.
That a physical good can now have its
digital equivalent.
And that those two things share
a reality, a provenance.
So that means that I can have a
digital twin of my art and I can
store it in a basement and keep it
or in the airport locker keeping the tax,
dollars away from it. While the digital one
of one of it is touring around and
being shown being interacted with. Damien Hirst sent
a piece of art to the moon. Nobody's
interacting with that thing. But if it has
a digital twin on earth, I can give
that a like. If I wanna go to
the Louvre and I go to a digital
twin of the Mona Louvre, that's of the
Louvre, that's different than going to just a
simulated version. So if you go to a
simulated,
XR version of the Louvre right now, why
do I care about seeing a flat JPEG
of the Mona Lisa? But if I pay
a ticket to go into the digital twin
of the Louvre to see the one of
one that I can actually add a like
to, a painting that's 500 years old that
now my like is a part of and
will be there for the next five hundred
years, I'm paying for that ticket.
Not to mention derivatives.
When I buy an object, every single object
kind of becomes a point of sale. And
every single person who owns something can be
an affiliate seller.
So that means distribution networks change
to peer to peer rather than requiring a
centralized platform for distribution.
This is this is just the beginning of
a lot of different possibilities.
Cool. Well, where can people find you if
they want to? Like, if they wanna follow
what you're working on,
go to, like, you know, or or find
out about this NFT, you know, and the
stuff you've been doing, where can they go?
So, we are starting with mark. Art. So
m r k d. Art is an informational
page right now. We're doing a presale, and
you can always find me on LinkedIn, Jamie
Schwarz,
bearded smile. We'll be looking at you. And
do you blog?
I do through LinkedIn.
My day job as a brand therapist, if
you go to brandtherapy.coach,
you'll see an awful lot of speaking like
this and, you'll also find a GPT version
of me. So if you click on that,
you'll be able to add your own brand
to it. And then the GPT will become
your brand so you can have a conversation
with it. Oh, interesting. That's really cool. Awesome.
Yeah. NFTs can hold AI. There's a lot
there too.
Yeah. It's really cool. Well, it's been a
fascinating conversation.
Thanks for coming on, Jamie. And, and we
will try to keep in touch. And, if
you have other stuff in this area you
wanna talk about,
you know, you have my email address. We
can hang out and do another episode of
the Edge. It's it's We're gonna have a
lot of really awesome things to announce soon.
The one big thing I can do now
is say Mark dot DJ is gonna be
fronted by Keith Shaquille and Public Enemy.
So
okay. We're gonna have a fun conversation about
music pretty soon. Alright. Cool. Awesome.
Okay.
Let's see. I'm Russ White. You can always
find me here at the hedge on rule11.tech.
You can find me on LinkedIn.
You can find me on x or Twitter.
You know, I forgot to ask you,
Tom. Oh. Where can people find you? LinkedIn.
Go ahead.
Faster.
LinkedIn.
Not my space. Different time.
Different time. Yeah. Different time.
Cool. And, anyway, we know we live in
an attention based economy.
So we're happy that you spent all this
time hanging out with us talking about NFTs,
and you stayed all the way to the
bitter end of this podcast. See, I did
it, Tom. I did it. So, anyway,
we hope you enjoyed this episode of The
Hedge, and we will catch you next
time.