Dec 16, 2018, 2:50 PM ETConference Presentation, Keynote

Crypto, the Future of Trust

Historical trust shifted from social trust (reliance on facial expressions and body language in nomadic groups) to institutional trust (reliance on schools, governments, and corporations).
Institutional trust is currently reaching its limits, evidenced by high-profile failures such as the Wells Fargo scandal, Equifax hack, Facebook data issues, and the 2008 financial crisis.
Current trust models rely on human-driven recourse (e.g., disputing credit card charges with a team of humans) rather than technological guarantees, which fails to scale to 1.7 billion unbanked people.
The annual cost of credit card fraud is currently $190 billion to $199 billion.
A new programmable trust paradigm is emerging, where trust is guaranteed by mathematical and physical laws rather than human institutions.

Web 1.0 protocols (TCP, IP, SMTP, HTTP) were open source and neutral, enabling a single global internet built on cooperation without gatekeepers.
Web 2.0 shifted trust to proprietary code controlled by a handful of powerful intermediaries (e.g., Facebook, Google, Twitter) who act as new gatekeepers of data and user interaction.
Web 2.0 companies control data flows, user exit, content discovery, and capital and can change platform rules unilaterally, disenfranchising users and developers.
The presentation argues for a transition from "don't be evil" (institutional) to "can't be evil" (protocol-level constraints).

Crypto networks utilize open protocols combined with cryptography to create self-policing, decentralized systems where security is derived from math, not people.
Unlike traditional encryption for secrecy, modern cryptography's primary value here is making data tamper-proof via digital signatures.
Bitcoin (2008) introduced a community-owned database where security is secured by Proof of Work, an incentive structure where miners expend computational power to validate transactions and earn newly minted Bitcoin.
Ethereum (2014) expanded the concept from a transaction ledger to a "decentralized world computer" capable of executing arbitrary computer programs (smart contracts) that are collectively owned and mathematically guaranteed to run as written.

DAI (Maker Protocol): A stablecoin pegged to the US dollar, created via a smart contract that requires borrowers to post crypto collateral (e.g., Ether) for loans; if collateral value drops, the software automatically sells it to maintain the peg.
Compound: A software-based money market algorithmically computing interest rates for lending and borrowing crypto assets without banks.
Compound + DAI: The combination creates a software-native consumer bank that originates loans and executes margin calls entirely in code.
Filecoin: A programmable marketplace for storage where strangers can trade spare laptop storage for currency without a central intermediary, relying on mathematical incentives for verification.
CryptoKitties: Demonstrates verifiable digital ownership of unique assets where ownership is recorded on the blockchain, persisting even if the original company fails, and allowing portability across games.

The current crypto ecosystem is nascent and faces significant technical hurdles including performance issues, missing privacy features, custody/key management risks, KYC/AML compliance, and poor developer/user experience.
Future iterations are expected to address these gaps to build complex systems like decentralized social networks and search engines.
Web 3.0 is characterized as open source, collectively owned, decentralized, and neutral, serving as a foundation for a new "golden wave" of innovation.
Trust is shifting from a top-down flow (institutions to individuals) to a bottom-up flow (individuals and software to the network).
The ultimate goal is to allow cooperation at a scale previously impossible by making trust software.