Africa is where the tough get going

This month, members of the team are in Africa, meeting entrepreneurs and politicians across the continent. Here are some edited parts of a speech by IOG chief Charles Hoskinson at a recent event in Cape Town.

This is a long tour. We’re starting in South Africa and working our way all the way up to Egypt. We call it the pan-African tour. You know, we’re really passionate in this company. There’s brilliant people who work at IO and they come from all around – 56 countries, 576 employees. 

The heart of the company has always been changing the systems of the world, improving them for everyone, everywhere. You see, blockchain technology is really a larger conversation. It’s about how the world globalizes. How do we make decisions about how we’re going to come together and operate in the 21st century? In prior centuries we stood on the moon, built all kinds of amazing things like planes, trains, and airplanes, and horrific things like nuclear weapons. But there were winners and losers. There were hierarchies. Some people were on top. Some people were on the bottom. We just accepted that as the status quo. 

The 21st century may be the first where we have one global community where everyone in the world – regardless of where they happen to be born, the language they speak, color of their skin, their gender – lives pretty well. Now to get there, we have to have great technology. We have to have cultural changes. We have to kind of grow up a little bit as a species. But most importantly, we have to have the right systems and the right incentives behind the systems. 

The blockchain industry is basically the Swiss army knife of systems and incentives. It touches everything. It touches voting, it touches property rights, it touches something as fundamental as identity. Who are you? Are you a good person? And it asks philosophical questions about who should be the custodians of these things. Should it be a government, a transnational body, a private company like Facebook or Google or Microsoft or Apple? Or should it be something else? The power of decentralization is it gives you a paradigm, if you do it right, instead of ‘Don’t be evil’ – it’s ‘Can’t be evil’. It actually gives you the ability to have inclusive accountability. What’s that? If you don’t trust me, you can verify yourself. So when you vote, normally you trust your government to count that vote, right? Well, wouldn’t you like to be able to check the vote yourself? That’s a pretty fundamental thing, a pretty simple thing. 

You know, the US recently lost another war. And many billions of dollars worth of military hardware disappeared. So if I go to the Pentagon and say, ‘Hey, can you give us some records on all that stuff that just disappeared?’ ’Oh, we lost them. So sorry.’ When it comes time to pay taxes, though, the US authorities can always find my records. Go figure. 

I can’t check any of the data. I can’t check the records. Something so simple as that, in a modern hyper-connected society, 2021. The most powerful country, or so it claims; the richest country, or so it claims; certainly the largest debt country – and it just loses records. Wouldn’t it be nice to live in a world where anything someone tells you you can check it yourself and know that it’s true? Whether it be a credential, your vote, or your money. All these things – work your way through. That is what our industry promises. We’re after inclusive accountability, resilience, decentralization. We’re after rules, terms, and conditions that do not require nation states or corporations to play nice. You just simply can do it yourself. 

Why is this IOG team in Africa? Well, Africa is a really special and interesting continent in that it’s going through a massive upgrade. There are no allegiances to the systems of the past because those systems haven’t historically worked out so well here. So that means over the next 10, 20 years, every single thing – from how compliance works to how stock markets are going to work to how national ID works to how academia is going to work – is up for change. And as an entrepreneur and an innovator, that’s where you want to be. You don’t go where the ball is right now. You go to where the ball is going to be.  

If the whole world is globalizing and changing, you want to be where all the systems are going to change first, because if you get it right, more wealth will be created here over the next three decades than in Europe, the United States and China combined. That’s just how it is. It’s why the US got on top in the 20th century. It just simply had a better system than the competitors. And everything resets when you have technological change. We now live in a global economy. People from Africa are going to be on equal footing with people in Europe and America if we do things the right way. And then it’s a meritocratic race, and I’m going to bet on the people who are tougher, more resilient and more entrepreneurial 10 out of 10 times. They’re going to win – it’s just that simple. 

So IOG has a pan-African view as a company. We started in a pretty difficult country to do business in, Ethiopia, and you know what? Everywhere we looked, we saw well-educated, well-intentioned people who really did want change. And they worked with us. Sometimes the system worked against us; sometimes it worked with us. But everybody remembered why they were there. And it was the privilege of my career to announce a deal of five million people that could grow to 20 million, that could grow to a national ID system of 110 million in just a few years, and that could grow into a voting system, a payment settlement system. It can grow to anything. It’s kind of like the stem cell: once you’re in, you’re in, and you can keep navigating and growing. And then how do we take that to Kenya, to Nigeria? That’s 400 million people – more than the population of the entire United States – within grasp in five to 10 years.

What’s most extraordinary is that this will transform the lives of people. Now, boring work has to be done, dry presentations given about credential this and verification that. And they’re very necessary. But at the core of all of that are people. And a lot of people right now live a life where no matter how hard they work, they can’t prove that they worked hard. No matter how good they are, they can’t prove they’re good. So what does that translate to? It translates to lack of  foreign direct investment. It translates to a hard time getting a job. It translates to high interest rates, sometimes 40% per month. But when these systems come in, they can prove basic things. And people get the job. The interest rates fall. It translates to a mass uplifting of the people of the nation. And when that happens, everybody’s going to want it. And if everybody wants it, everybody’s going to get it. 

The smart cow effect

You see, that’s the key. It’s the ‘smart cow’ effect. I’m a rancher in addition to a technologist, and one of the things you learn when you rear animals – in my case bison – is that if one of your animals is particularly smart, they influence the whole herd. They go and figure out how to open up the fence. Once one cow can get out, every other one can, and you just wake up and they’re all gone. Similarly, one country changes the way identity or voting works, and that’s all it takes: every other country will change very quickly, including my own. 

In America we’re kind of the original rebels. In fact, Europeans were really terrified of us in the 18th century, 19th century. We had this whole revolution thing. We got pretty good at killing kings. But somewhere along the way, we went from revolutionaries to a situation where it takes two years to get a permit to build a fence for my farm. Something went wrong, you know? And there are a lot of people in the United States that like change too. In the state of Wyoming, we passed 26 pro-cryptocurrency laws. A massive number of companies have come to Wyoming. We have Dao standards decentralized autonomous organization standards, asset clarification standards. The economy’s growing by leaps and bounds. A $4 billion company, Kraken, moved in. All this amazing progress. 

Meanwhile, in Washington, the treasury department does everything in its power to try to kill our industry. They say it is threatening. A $2 trillion industry just pops up in its backyard and the US government is trying to kill it. So how do I change that? Well, I can go beg Goldman Sachs to do it, but they’re not going to. No. However, I can try to change things here in Africa. And that smart cow effect might work just as well in influencing the United States as it does elsewhere. You see? So you create the change that you want. 

Never be cynical, never be hopeless. If you want to change the world, go and change it. Years ago I was poor. I went to Japan, started Cardano. And no one took me seriously. I said, ‘We’re just going to build this blockchain and then go to Africa and talk to heads of state and change the world.’ And they’re like, ‘Yeah, OK. What qualifies you?’ ‘Oh, I’m just a math dropout guy. But don’t worry, it’ll all work. It’s totally legitimate.’ 

Eight years later we’ve got an army of millions of people and billions of dollars. And we’re meeting three heads of state on this tour. We just got it done one step after another. And I’m not special. I’m just kind of an asshole who’s resilient as hell. And that’s OK because there’s a lot of assholes who are resilient as hell in this audience too. All you gotta do is be passionate. That’s it. That’s the point. And this is probably one of the most passionate, resilient continents in the world. There are no people tougher than Africans. It’s true. Nobody is tougher. So if you’re going to bet on the future of changing the systems of the world, this is where to be, with Africans – as long as you give them the technology. 

Blockchain is as much your technology now as it is mine. We’ve written 120 papers and none of them is patented. They’re all open source. You get to use it as much as I do. You know how much do you pay for it? Nothing. They’re royalty-free. We’ve written over a million lines of code for Cardano. It’s all open source. It’s your code as much as it is my code. When somebody gets a decentralized digital identity (DID) it belongs to the person. When you get a Microsoft credential or a Google ID or an Apple ID or a Facebook ID, it belongs to Mark Zuckerberg, Larry Page, Apple. When you get a DID it belongs to you. And you can take it anywhere. The minute we start closing more deals across the continent, the credentials of all those kids in Ethiopia will be interoperable with the credentials in Zanzibar, Burundi, South Africa. So when you travel, you take ‘you’ with you, and you can’t be shut out of ‘you’. Simple concept, right? You did the work – you should own it. 

And it’s the same for business registration and all kinds of things. And that’s what’s so cool about Prism Pioneers and Catalyst. If this sounds like a good idea, and you’re an entrepreneur, then build a business on top of that infrastructure. And there is $1.4 billion available to go and build businesses on top of that. Pretty simple, right? And if your business works and it’s built on open DNA, then people can’t be locked out. That means everybody can build together. We create one global community where everybody’s equal. That’s the dream, and it’s why we’re here.

What excites me is what you do with what we’ve built. Because the things that we have provided, or that are coming out this year and next year, really can be used to run countries and businesses. And that’s not a joke. They could process millions to billions of transactions. It does all the things you’d ever want. And I’m excited about the prospect of living in a world that’s just a bit less cynical, a bit more fair, a bit more honest and a bit more open for everybody. So thank you for coming. I appreciate it. 

Hoskinson then had a Q&A session with two South Africans, Simon Dingle and Joshin Raghubar. Dingle is a fintech entrepreneur and author of In Math We Trust and Beyond Bitcoin. He tweeted recently that when people realize what Cardano is, it’s going to ‘melt faces’. Raghubar is the founder of iKineo Ventures and chairs Africa’s largest nonprofit tech incubator, the Bandwidth Barn. Hoskinson also took questions from the audience. The topics covered ranged from computer games to synthetic biology.

On games:

Some players of games like EverQuest, World of Warcraft, Skyrim, and Diablo 2 have devoted more than 10,000 hours of their life to them. That’s like what you do to become a mathematician or a doctor. You have lifelong skills. And the minute the server goes down, all of that progress just disappears. 

In the new generation of games that are coming you have the ability to save that state and make it portable. So what you do in game A can be taken to game B and C and D. There’s some ‘permeance’ there. 

And then, with the NFT revolution, it eventually becomes a market item that you can sell and trade.

On the need to create jobs in Africa:

In demographic terms, Africa is the youngest continent. In Ethiopia 70% of the population’s at or under the age of 30. If you give them internet and a great education, then suddenly you’ll have an incredibly entrepreneurial group because they don’t tolerate the status quo. You say, well, how will we create jobs for all these people? Well, they’ll create them for themselves. 

Technology and the metaverse:

I believe that things like synthetic biology, the internet of things, and artificial general intelligence – if they’re pushed through – will create tens or hundreds of millions of jobs. Ten years ago no one had a concept of the metaverse, and then Ready Player One comes out and we’re like ‘Oh yeah, we get it’. Probably 100 million people will have jobs inside the metaverse by 2030 or 2035. There’s no geographic bias to that. Most of them will probably be in Africa, Southeast Asia, and South America.

Biotech, evolution, and the blockchain:

I have a biotech company that does anti-aging regenerative medicine. It’s still in silent mode. Right now I’m negotiating with Colossal. It has just announced a project to bring the wooly mammoth back by 2027, and my ranch is the perfect place to do it. They have artificial wombs and the whole genome of the wooly mammoth, and they’re going to clone one.

What’s interesting about the intersections of synthetic biology and biotech and blockchain is there’s a lot of open questions. Who owns the mammoth genome? And then what happens when your mammoth has babies? Who owns that DNA?

It’s the same question in NFTs. You issue an NFT and someone buys it and sells it to someone else. There’s the artist who created the NFT. Should that be perpetual or at some point should that decay? The very same set of questions could be reapplied to synthetic biology for designer organisms, de-extinction efforts, and so forth. 

There’s a huge problem with poaching in Africa and other places. There’s mass extinction, especially in Madagascar. Ethiopia has lost 80% of its biodiversity in 100 years. It’s crazy.

How does a nation state create a strategy for de-extinction or for preservation of animals? Well, the same technology that could be used to bring the mammoth back could be used to bring those lost species back. How you create an economic system that prioritizes that is also a blockchain question. It’s an incentives question. So I think what our industry can do for the emergence of the biotech stuff is helping sort out some of the difficult questions about ownership of things, the transfer of things, the prioritization of things, as well as alternative funding models. 

Health data, privacy, and the vaccine:

As consumers we’re shedding all of this data and we don’t own any of it. It’s used in making decisions about our lives and we’re excluded from the process. That’s OK when most of society is still on paper and not digitized, but it’s dystopian when everything gets digitized.

The concept of self-sovereign identity is really the skeleton key because the data is not just data: it’s data plus metadata plus identity. So the identity really establishes the use policy of how it is shared, how it is revoked, and who controls it. Usually identity is the provenance of states and data is the provenance of private industry. It’s very siloed. And you can’t build one of these systems without the other. DIDs are pulling all these pieces together in a very clever way. And it puts the individual, the owner, at the center instead of the government or the enterprise. And then, people actually have to include you in the conversations about how your data is used.

Israel got first access to Pfizer because it had something to offer that other nations couldn’t. Countries like Germany were offering huge prices, but Israel said, ‘Well, Pfizer, if you had access to the medical records of every citizen of our country, wouldn’t that be interesting to you? Millions and millions of people. That’s like the world’s largest clinical trial.’ Because all the medical records of the country had been centralized it was easy for them to do that.

The hard question of governance:

I think as an industry we have a pretty good sense of what we need to do for scalability. It’s just a question of trade-offs and philosophy. I think, out of necessity, interoperability will come either as a network effect or through a collection of industry-wide efforts like Hyperledger and W3C stuff. 

The decentralized government is really hard because humans have never built a government that works. No one’s happy with their government everywhere I go.   

It’s a great transition: turning Cardano from this amazing academic – now amazing commercial – project to a self-governing, self-evolving organism that is led by its users.

This is a devil of a problem. Some people believe you can do it on- chain; others say you can’t. It would disappoint me if we hadn’t made progress by 2030. Now progress doesn’t mean you solved it. Blockchains are moving from homogeneous systems to heterogeneous systems. Design mirrors biology; design mirrors life. You need cell differentiation, you need eyes cells and ear cells. Analogously, a blockchain is useless if you don’t have heterogeneity because you need to interface it with medical records and voting systems and telecommunication applications, and every transaction and user is different.