Webinar – COBIT 2019 Use Cases: Tailoring Governance of Your Enterprise IT



odhh hello and welcome everyone and thank you for joining us for our COBIT 29 webinar which we're delivering with our partners at osaka my name is Mark Constable I'll be your host for the webinar and I'm delighted to be joined by presenter Mark Thomas so mark is president of a scalp consulting and is an internationally renowned expert in governance risk and compliance specialized in information assurance IT strategy and service management with a wealth of experience in a variety of industries including government health care finance manufacturing and technology services Mark's also an ambassador for Osaka publishes a publishers of the COBIT framework and was an integral part of the Kobe 29 offering team so you're in very good hands for this session so in today's session mark will take you through the key elements of the latest iteration of the copic framework and we'll be sharing a variety of examples on how best to leverage value from it before mark gets into the detail bear with me a few more moments while I'd cover a few housekeeping points so the first of those is the fact that we're recording the session today and everyone that's registered will receive a follow-up email from us as soon as the recordings online and some other useful bits of information secondly you have an opportunity to raise questions at any point during a session so you should see on your GoToWebinar control panel an option to submit questions we'll try and address those as there's as many answers as we can towards the end and last but not least we welcome any feedback because that helps us with planning and delivering webinars in the future so my email address is on screen there and you'll also see options to provide feedback in the follow-up okay that's not for me until we get to some questions I've hand things over to Marc Knox joining us from Texas in the US so it's good morning Marc and over to you thank you very much mark I appreciate it thanks everyone for joining put your seat belts on because we're going to throw a lot of information your direction so a little background on why we're doing this webinar so well if you think about balancing performance and conformance in an organization it's a big task when you add up all of the regulatory the compliance and conformance needs of any organization there's going to have a major effect on your enterprise performance you do not govern and manage it effectively that's where Kovac comes in and you guys know I'm a big fan of COBIT but have you ever tried to flip through any framework publication and say oh I get it right you can't just flip through a favorite framework location and say I understand how this works because if you think about it frameworks provide guidance for all types and sizes of organization but you're supposed to modify this to meet your needs and therefore you need to find the information in a framework that's applicable to you and that's where I think COBIT 2019 has done a superb job of being able to allow you to design your implementation of governance and management and so I think this is nice so I put this webinar together so you can understand a little bit about the COBIT 19 for 2019 framework of course but I have a couple of things that might help you out here and they're called use cases we're not going to cover every one of these use cases in this webinar they will be available to you as a as a document after this after this webinar but they can help you navigate through the different parts of Kovach 2019 and where you go in the publications and help you find what you need to find so I hope I hope that are useful to you so learning objectives very quickly understand the key elements of Kobuk 2019 and where you find some pieces in the publications of course how you adopt a tailored enterprise governance framework this is gonna be really really the big part of this webinar and then of course some use cases I get questions all the time and so do you how do we use commit for this how do we use Cobie for that so I created a set of use cases and they identify some areas that you can go to within the Cobie framework and the publication's said that you can create your own tailored governance system so of course you know we have to talk about governance of information and technology first so really set the stage for understanding why these frameworks even work for us so regardless of the industry regardless of your size your location the type of your organization one thing will never change and that is that your organ and you as a service provider to that organization exists to create value for stakeholders so it's important to remind ourselves of this especially today with big big pushes and digital transformation high velocity organizations we're at being asked to deliver more better and faster so we oftentimes get so into the tools and technologies that we forget the basic elements of creating Staker of code or value which are benefits realization are we doing the things we said we'd do and do they offer our stakeholders what they're expecting risk optimization are we making informed decisions and of course are we optimizing our resources while we do these things let's get right into it COBIT 2019 this is hot off the press and I really really like what COBIT has done for us so a couple of things I wanted to make sure I clear up for us so that there are some with with IT or information and technology really being within the fabric of everything we do in an enterprise today we have to consider this as an overall Enterprise wide tool so I always say there's something in Co bit for everyone but let's clear up some myths before we get started we know what komen is if you look at the first couple bullet points you most likely have been part of the Kovach 5 or even Co bit for for one family all right a couple of the things things have not changed it's still a governance framework for information and technology it's aimed at the entire enterprise we've not only seen a separation of governance and management what we've done is just had a distinction between governance of management but here's where it gets good Kovach defines what we call components to sustain the governance system and the next two bullet points are awesome we have design factors that we use when we're building a tailored governance system and we have governance issues or governance and management objectives as a part of COBIT what COBIT is not to be very clear it's not a full description of the whole environment Kovach doesn't answer your specific unique questions about your or zeige in your culture it provides you a framework and a method for you to get to that solution so it's not talking about business processes we'll look at these in a little bit but you notice we don't have process accounts payable process accounts receivable these are the information and Technology related processes that help us manage and govern the information that are used across all of our business processes and of course it's not a technical framework I always like to say COBIT is a framework to manage frameworks it's it's been it's been a framework that I've used in many organizations to help me do that and of course Kovach does not prescribe any specific IT decisions for you so having said all that let's jump in and take a look at the major differences between COBIT five and cobia 2019 of course we have modified principles we this it what's nice here is we will see principles for both both governance systems and governance frameworks we will see governance components that replace what we knew as COBIT five enablers we have new focus areas with specific governance practices can be directed directed and of course the addition of these things called design factors these are used to influence the design of an enterprise's governance system I'll walk through these a little bit later on you might remember in COBIT 5 web 37 processes COBIT 2019 we have 40 governance and management management objectives that relate to 40 updated processes within COBIT we have an updated ghose cascade updated performance management which now includes maturity models really based on CMMI which I think is absolutely awesome an updated business case and of course updated publications so let's walk into who is the intended audience for this of course I'm not going to spend too much time on this slide I want to get into the meat of this we have internal and external stakeholders of course you can see from an internal perspective boards executive management business managers IT managers assurance providers and risk management as well as my external stakeholders regulators my business partners think about third party strategic partners and of course my IT vendors this is awesome so let's take a look here the product architecture so what if you look over here on the left side of this slide so inputs into basically the the COBIT 2019 included things like COBIT 5 as well as new and updated industry frameworks standards regulations in a lot of bodies of knowledge as well as feedback and input from our community what you're looking at here is what we call the Co bit core this is the basis of Co bit 2019 so this consists of what we call 40 governance and management objectives they're organized into five domains you might recognize these from code 5-1 governance domain of for management domains each of these is related to one process publications for the core if you look down at the bottom include the COBIT 2019 framework and of course that governance and management objectives guide where this gets fun is we have design factors these these can influence the design of your governance system and position you for success in how you use information and technology of course we have focus areas these highlights high areas of interest and in high influence areas and they can be helpful in designing that governance system specific to your needs the applicable Kovach publication of course is what we call down at the bottom the COBIT design guide now we could take the enterprise governance system for information technology by using information from what we saw earlier the core design factors focus areas and performance management areas of covet so we can adopt or implement that tailored governance system this is where I believe that the COBIT 2019 implementation guide is extremely useful now in the future COBIT is going to call upon the community to propose content updates to be applied and we can contribute to the further further further growth and including insights of the Cobie framework in the future ok so let's talk a little bit about the publications and you'll notice here up at the top I just have in in quotes the framework guide because I don't want to spell out the entire term the entire rub details of every one of these but we have what's called the framework god this is the overall structure it explains the parts of the framework we talk about the governance terms the introduced the introduction of the governance system and describes the updated performance management piece so throughout this presentation you're going to see me call it's called this the framework guide we also have what's called the objectives guide now this is the governance and management objectives publication this includes the 40 governance and management objectives that I talked to you about earlier separated into the governance domain and for management domains remember each one of these governance and management objectives is broken up is is aligned with a single process well my favorites here is called the design guide it introduces my focus areas and then now gives me a design workflow that we'll talk about here in just a few minutes but when we use this in conjunction with the implementation guide we now have a powerful way to look at not just designing that that tailored governance system but following through with the implementation and the adoption of of governance throughout the organization so you'll see that I'll call these framework guide objectives guy design guide and the implementation guide just so that I have enough room to type some other things in some of the use cases that you're gonna see here very soon some key points of koubek 2019 I think this is very important for us so we have updated principles like we mentioned earlier we might remember in Kobe at 5:00 we have the cobia 5 principles in Kobe 2019 we've broken those down into what we call governance system principles and governance framework principles now I'm not going to cover all these in detail because you can you can go to a course it and read the book for those kinds of things but I'm really trying to show you the overall in the key points of this framework next we have what are called governance components you might remember these as enablers in COBIT 5 so to satisfy governance and management objectives we need to establish tailor and sustain a governance system from a number of components and that's what we're looking at you might remember back in Cobie 5 we had these enablers they were great but we really didn't understand how to link those enablers to processes into other areas now we're linking these components to governance and management objectives we also have focus areas these describe these certain topics these domains were those issues that can be addressed by a collection of your governance and management objectives and also the components you notice here there are a number of focus areas but this could be unlimited for you Cobin is open-ended because new focus areas can be added as required subject matter experts or practitioners contribute look there are some really really hot topics right now for small to medium enterprises cyber risk cloud computing privacy and a hot topic being DevOps and then we have the design factors these influence your design of your governance system and help you position it for success we're gonna walk through how you can use the design guide tool with these design factors here in just a few minutes though so they're listed here we'll see in a few slides how they can impact that governance system of course more information and detailed guidance on how to use the design factors can be found in the Kovach 2019 design guide publication of course we have what I mentioned earlier governance and management objectives so this should look pretty familiar to you if you are a former commit user similar instructor but instead of processes we now have but I said earlier governance management objectives in five domains of course we have evaluate direct and monitor on the left-hand side this is the governing body where the governing body evaluates things like our strategic strategic options directing senior management on those options and of course monitoring the achievement of our strategy and the and the management domains aligned plan and organize build acquire and implements of course deliver service and support monitor evaluate and assess so how do these translate into governance and management objectives and even processes well that takes us to this next slide now this this slide what you might have seen earlier we had what I call the koubek core and that was a series of boxes I like to call the box of boxes but I wanted to put it in two columns so you could see that these are the 40 governance and management objectives remember in Cobie 5 with 37 of these things back in Co before we have 34 of them but we don't call them processes here they're called governance and management objectives so these these are each associated with the process so edn domain right we see it has five governance objectives remember they're associated with processes next we have APO it's got 14 management objectives Bai as 11 DSS has 6 management objectives and of course MEA you see over there with their management objectives notice that that there has been a suitable name change from Cobie 5 these were called processes with active verbs before today there are objectives from past tense we're not going to walk into the details of all these things of course you can find this in the what we call the governance of management objectives publication I'll show you where you can find that a little bit later of course we have an updated ghost cascade you've heard me say this before but I believe that the ghost cascade is one of our best-kept secrets in the industry this goes cascade helps you prioritize object objectives based on enterprise goals and based on stakeholder drivers and needs so it starts with stakeholder needs and drivers and they go to enterprise goals there are 13 enterprise goals organized into the balanced scorecard view including 2019 of course enterprise goals cascade into what we call alignment goals those are about what you might remember as IT related goals but that further supports this translation of enterprise goals into priorities so there are 13 alignment goals of course they're in the balanced scorecard view and they emphasize the alignment of your IT efforts with business objectives so it really is trying to avoid this whole frequent misunderstanding that these goals indicate purely internal objectives of the IT department remember we're looking at this from an enterprise perspective finally the alignment goals they will cascade down into what we call governance and management objectives I'll make the link with that into into processes for you here in just a few minutes okay so we've talked very quickly about about some of the key points of Kovach 2019 but what I really wanted to walk through was how you create your tailored governance system this is why Kobuk 2019 is the only thing that exists that helps you do this so let's walk through a couple of key points on this so how do I get from this thing called the Kobuk core to a tailored enterprise governance system well if you take a look at this journey if we saw the COBIT for the Kobuk core this is oK we've got the framework god we've got governance and management objectives but now we take those and we we consider those design factors because those design factors are unique to your organization and they're different for everybody we also look at those focus areas and the publication we're looking at there is called the design guide but once we consider how the design factors in focus influence us then we could create that tailored governess system and we can begin to adopt and implement that using the implementation guide for COBIT so take that into it to the next level here's what that implementation guides excuse me here's what that design guide is going to tell you I'm not going to walk through all the details but of course there are different stages and steps this design process has to help you prioritize your objectives and it also helps you look at target capability levels so the steps include understanding the enterprise context and strategy determine your initial scope of your governance system refine that scope and then finally conclude the governance system design so four steps in this so it's recommended to put all guidance obtained during these different steps on a canvas so we're gonna see what a canvas looks like here in a little bit so we resolve any issues at the last phase and then of course by following these steps you can realize a governance system that's tailored towards your needs but you still have to implement it which takes us to the implementation guide one of the common reasons why governance system implementations fail is they're not initiated designed and then managed properly as a program so that benefits can be realized remember that's one of the reasons we exist to ensure benefits realization this is where this implementation guide helps us now there is no real change to the overall structure if you recognize this from Cobie 5 still have seven phases and we have three perspectives essentially the first three phases the drivers where are we now where do you want to be those are the design portion of your implementation and the last four really focus on your implementation so we'll see on this next slide how the design guide and the implementation guide actually come together so if you look at this you notice on the left-hand side this is the COBIT implementation guide remember we said there were seven of those phases I'm only showing three of them here because I've mentioned yet that in the previous slide that the first three phases are focused on the design well the last phases are focused on implementation so here's where the link is so each one of these phases has a specific connection to the four phases of the design guide steps one through four that I mentioned – you've just a little bit earlier so I think that's nice that we now see two documents that are you know before we didn't have a design guide but we had this implementation guide and it was great but we really didn't have a lot of guidance around how I can use my unique company attributes and aspects to deploy a tailored governance system so so by converging these two documents now we can have us a tailor system that is unique to your organization so I mentioned earlier this thing called a canvas and once you look you got here don't let the don't let this overwhelm you you don't have to know the specific pieces of data in this but this actually is is from the design guide tool we'll talk a little bit more about this in a few minutes you can actually download this out of the Asaka side so this excel tool now has a certain that has some pieces to it that helps you do that tailoring so the hard work is done for you you just have to understand a little bit more about your organization so first you look at yes yes all right let me get to just there we go till we have our governance and management jet this here on the left-hand side remember there were 40 of those you don't see them all on this slide but that's where the governance management objectives are next you see across the top we see the design guide workflow steps of course this is very small but this represents those four steps to designing your tailored governance system right across the top next you see design factors you might see the design factors across the top but each the input values for each of those design factors notice are on in their individual tabs down at the bottom of the spreadsheet once you input your specific organizational information that gives you the results on this canvas so I really like how this looks because if you think about it remember every one of those design factors is unique to you so if you think about goals you think about the competitive environment you think about how we how IT deploys solutions and those are dependent on your organization and based on that it's going to give you a readout that says here are the specific governance and management objectives that appear to be the most applicable and valuable for your organization based on the information you put in that design guide tool of course one of the nice things that it also does is it provides us information Asian on what the cape of what a target capability level might look like now we're not going to jump into detail on the capability module or the capability assessment and CMM maturity modules but we just want to make sure that based on my specific needs I may not have to be at a level five I may only have to be at a level three or level two which are difficult in themselves right but it gives us guidance on what capability levels are based on our specific enterprise information so I think this is really really cool you can download this tool and aisaka org it seems to be pretty self-explanatory I think that COBIT has really made it an easy-to-use tool but remember this is just the design portion you have to implement these pieces and that's where the implementation guide is helpful for you so I hope that's been valuable for you to see how the design guide tool helps you look at and select your governance management objectives which then of course help you look at what your processes might take a look at okay so this is this is the fun part so what are use cases now before I jump into specific use cases this happens a lot right people say well I've got some common questions and and sometimes you're not quite sure where to look through in the Kobuk documentation for certain types of needs you have so what I did was assembled basically the most common questions I've received about Kovach 2019 Orrico but in general my enterprise uses multiple frameworks how does COBIT fit I'm launching a new IT governance group at our company where does COBIT say I should start our company uses previous versions of COBIT how do we go to commit 2019 and this is a biggie with the increase in security compromises we're seeing in this industry how do i leverage COBIT to help me do this so those are not the use cases themselves but what we did was took those use cases excuse me took those questions and design some specific use cases that I could share with you I'm only going to cover one of those use cases because you will get a download you'll get a document as a part of this webinar that talks through the specifics of each one of the use cases that we've put together so what is a use case right if you think back to your business analysis type of work it's telling us how an actor integrates with a solution so we can accomplish goals so the use cases that we have we'll see on the next few slides there result of those questions that I'm receiving that I showed you a little bit earlier they these use cases this is very important these are not found in the COBIT 20:19 guides they're based on my expert opinion and I'm telling you where I believe I would look and the steps I would take based on some specific use cases so these are not found in COBIT I want to make sure that's very clear we're telling you where that you might be able to look and comb it so I have eight use cases and we've brought those up for basically those four recurring questions again not all of them recovered here but they'll be available as a download orb or likely as an email that comes to you with these use cases so let's jump in let's take a look at what I think those use cases look like so I know this slide looks very busy a lot of information and details on this slide but if you look at those four boxes those are the four questions that seem to be recurring questions number one my enterprise uses multiple frameworks how does commit fit so I created use cases 1.1 and 1.2 the first one is use Co bit as a framework to manage frameworks this comes up a lot and you probably heard me say this before but as an overarching governance framework for enterprise information and Technology Co P is a beautiful place to you to a beautiful framework to use to leverage all of the other frameworks think about it you've got ITIL you've got ISO standards you've got PIM buck you've got prints – you got NIST COBIT seems to be a beautiful what I would call middleware that's what that use case is all about we have used COBIT to determine which industry standards are applicable to a particular process course you have got that information available to you because this is always important because remember Kovac doesn't tell you everything you need to know it doesn't tell you down to the detailed best practices so what COBIT says is we're gonna tell you the things you need to do to accomplish your objectives and that value how you do those go to this framework go to this standard go to this body of knowledge so those are the first two use cases we have in the second one I'm launching a new IT governance group where it's COBIT say I should start the first use case you will see is how you use Kovac to identify organizational structure for the enterprise governance of information and technology you know one of our components is organizational structures so in this use case you'll take a look at those different organizational structures based on pretty much the EDM domain evaluate directed monitor which is the governance domain for you use case to to use Kovac to create a tailored governance system surprise surprise right now this is going to basically be the using the design factors and using the focus areas that is the use case that I'm going to showcase for you in the next couple of slides our company uses previous versions of COBIT well use case three one says understand the key differences well I'll talk to you about them a little bit here but I also will provide you places in the cook in the in the new coated publications that will help you know where to look and then of course update an existing capability assessment to the COBIT 19 performance management guidance remember we updated performance management Kovic 2019 so don't let don't think that the COBIT 5 process estimate model is gone that's not gone we still conduct capability assessments at the process level but above that we start looking at maturity levels and that's where CMMI B plays a big role for us last two use cases select the appropriate Co bit measures to ensure proper information protection so of course you're gonna see some goals cascade you're going to see some design factor analysis in that use case and then of course use Co bit to determine appropriate information protection policies remember one of our kind of our components is Palo so now we're that use case we'll walk you through how to determine the applicable and appropriate policies not only based on Kovac guidance but also based on industry guidance that COBIT is drawing upon for this body of knowledge so I've mentioned before that I'm not covering every single use case in this webinar every one of those that I just explained to you there is a specific page that has a use case for that for that specific scenario but what I wanted to do is break out and talk to you about one of my favorites this 2.2 how do I use Coe bit specifically COBIT 2019 to create a tailored governance system so this is what your use case is gonna look like that for anybody who's done a lot of use cases in the past you probably know that this does not meet the UML standards the modeling language but I've really tried to adopt this so that we could explain different areas for you to look when when you're doing these use cases so the first thing of course we have preconditions where those Commission's that exist that that are driving this use cases this use case the success scenario anywhere between one and five steps I'm calling this my method if you would on what I would do if I were you of course the 2019 references this is I think where it's valuable cuz sometimes you just don't know where to look and the co big guides will follow that up with coasts conditions now let's jump right in take a look at use case 2.2 how I use commit to create a tailored governance system a lot of information sitting on this slide if you take a look we have these things called preconditions so if I need to create a tailored governance system using Kovach 2019 some preconditions might be hey I may have no key framework for governance or I may have a weak framework that helps me govern and manage information technology maybe I have a strong one and I want to update that but another precondition is that management and even the governing body is supporting the integration of what we call a single integrated framework into our governance model now I always tell people be careful about saying COBIT is your governance framework that's your framework to build your specific governance framework so how do you do that well first things first what I want to do is I want to understand my principles and remember we said earlier that there were two principles two sets of principles you want to determine your governance system principles and you also want to determine your governance framework principles so that's kind of a big deal because if you look at where you find that principles information and Co bit of course you're gonna go to COBIT 2019 the framework guy remember I told you I was just going to use my shorthand version of this and specifically you're gonna look into chapter 3 I believe the next step is you do it goals cascade remember this is the best-kept secret you need to understand stakeholder drivers and needs I want you to map those to enterprise goals I want you to map those through the alignment goals and I want you to map those down to the governance and management objectives where do you find this information the framework guide you'll find that in chapter 4 in Kovach 2019 the design guide there's the appendix in the back of the design guide that has the mapping tables those are similar to the mapping tables we saw within code 5 except of course they are they've been modified to meet that the the current needs of Cobie 2019 of course you can look at the objectives guide and where I want you to go for that is what's called chapter 4 the next step is determine your design factors and focus areas we cover those previously so this is big if I'm going to create a tailored governance system I must know my design factors and my design factors in focus areas so understand your relationship with these design factors because remember when you start going into this tool or you met let's say you do your own analysis there every organization is different in each design factor in each focus areas where do you go for this you go to the cub at 2019 framework guide that's chapter 4 where you go to the design guide chapters two and three to really get a good understanding of what design factors in focus areas are the next thing you'll do is analyze those design factors and focus areas so do that tool analysis a couple slides ago I showed you that canvas of that design guide tool go download that thing it's doing a lot of the heavy lifting for you when you're designing this so do the tool analysis and each one of the tabs at the bottom of that spreadsheet will give you all of the attributes and the variables that you need to fill in based on your organization based on your culture based on your organizational structures and that will help you select the most appropriate governance and management objectives and we'll also take a look at helping you determine target capability levels that are by the way they're done what we call what we call the activity level under each one of the processes where do you go for this you go to the design or excuse me you go to the tool kit that Excel tool that I want you to go download you'll also go to the design guide chapter four that talks about the the design factors and the focus areas and also go to the framework guide that would be chapter six last step I suggest for you is document those governance components understand the governance components so remember we had seven components and those are what we used to call enablers in commit five but for each one of those governance or management objectives that you looked at from your analysis above each one of those governance and management objectives is explained to you in detail by component area and remember one of those components is process there's 40 of those processes it will also talk to you about think about it all those things for every governance and management ejectives will talk about policies we'll talk about processes organizational structures services infrastructure and applications information items those are the inflows and the outflows right we have people skills and competencies those are broken down to each one so that governance and management guide is absolutely awesome there so what I want you to do is go out here look at the framework guide chapter for the objectives guide which is the governance and management objectives guide chapter four and they will also go it also tells you what the applicable industry guidance is for you for each one of those areas okay after you've gone through this scenario of course if you if you've done this and you've actually had management support you put some thinking around this you have post conditions those post conditions if you've used COBIT to create a tailored governance system would be now we have an end-to-end governance system for the governance of information and technology we have the tools that we have the setup for providing stakeholder value which was one of our objectives that we talked about early in this presentation we have a holistic approach to looking at this governance dynamic system which means as attributes or as things change my governance system can change appropriately we have a governance distinct for management remember we have governance domain and management domains governance provides the rules direction policy while management does the plan to build the running of the monitoring and now we have a tailored system to meet our needs ladies and gentlemen what you just looked through was one use case in your handout for this webinar all of these use cases all eight of them will have the same information or excuse me not the same information will have information in the success scenarios and the Kobuk 2019 references based on each one of those use cases so I hope that was helpful for you to hear me walking through my thinking on creating these use cases because I had to do this myself right I didn't know where to look at all the guides so I created myself these use cases to help me and as it turns out it also aligns with a lot of the questions that we're receiving from you now let's talk about tips to adoption I believe that there are some very important things that you need to keep in mind as you're looking to adopting either frameworks or adopting a governance system so let's take a look at some what I believe some of the top tips and tricks for you first and foremost go to the aisaka site download the Kobe 2019 publications in case you didn't know this they're free if you aren't a soccer member you go out you go download these if you're not an ice hockey member all you have to do is go out register but these are awesome for you so we're trying to make it easy for our community to understand COBIT and therefore we can receive more industry inputs in how we continue to update and and change the COBIT framework based on what's taking place in the market you guys know use framework as a framework to manage frameworks as redundant as they's as this sounds you probably are suffering from framework exhaustion you have them laying everywhere but the problem is nobody really has an overarching framework that knows how we snap in these other frameworks into our governing model so COBIT because we use some of the some of the most applicable industry standards frameworks and bodies of knowledge and we link the framework to that it now allows you to see how you can put that governance system together using multiple frameworks do this as it's our tip approach I know there is a big concern with a lot of people who say you don't implement a framework I agree I think you adopt an adaptive framework and when you talk about implementing governance you're never really done implementing write your own it becomes it becomes part of your normal continuous improvement or continuous operation which is why you saw in that implementation guide it was a circle or a wheel that said how do we keep the momentum going as the last step so you'll never be done with this do you not consider going through this this tool and you are good for the next five years right you have to make sure you're constantly updating this stuff so like I said before use more than one framework it kind of goes along the lines with what we said a little bit earlier it is designed to work with multiple standards and frameworks out there okay if you don't have influence over creating an enterprise governance system focus on your area you know this comes up a lot you know you know when you when you look through koban it says hey some of the requirements we have to have of course senior senior management support the governing body support and and the whole organization has to be on board well let's face it in a lot of organizations today if you're trying to implement or adopt IT governance you may not have the ears of all the people that you need to have so don't just throw your hands up and say it sorry I don't have I don't have my executive level support create and build this model within your area of operations the area that you can influence so this this Co bit even when you people look at code and say well it requires the board of directors well the board of directors is only one governing body of many governing bodies in an organization you may have a steering committee you may have a project review board you may have a change advisory board that's a governing body so if you could consider that in your in your in your design of implementation now if you could just deploy this within your specific area of interest I think that would be probably one of the best things you could take a look at so of course for the last things is get certified training for your team this interesting thing here is the bridge course today so the way that the Kobuk 2019 is rolling out so for current COBIT five there is a bridge course and there the training is out there today the best way of course to get that training is face to face but it's also available for self-study the exam is out there as well also there's a COBIT foundation course out there and I would suggest you take a look even if you are code at five I'd highly suggest go through the COBIT foundation course because I think I think there are so many changes and modifications to and updates to the model that it probably makes the most sense for you I kind of look at it from that perspective in the future we'll see the design and implementation course come out in April and that will take the things that we just talked through how you take those design factors and foe and it will take you through the training and certification on how you do that and go into an implementation so I expected to have a bunch of questions in this call and you guys if you've ever listened to what about what about webinars before you know I cram a lot of information into a very small amount of time but I hope you've enjoyed this and of course the recording will be available to you afterwards but I wanted to I want to kind of throw this out and do some closing and questions for you so that so we can jump in and you can ask me some specific questions and hopefully I can answer this for you so what have we done in this webinar we understood the key elements of the COBIT 2019 framework we did it very fast but I wanted you to understand kind of the key pieces and the changes and the modifications between Cobie 5 and coding 2019 we explored how to adopt that tailored enterprise governance framework and the governance system for you so we looked at the design guide we looked at design factors and we didn't do a lot on focus areas to be quite frank these specific guidance on focus areas is still yet to be published by our Saka but we looked at that and said use this tool to help you select the appropriate governance management objectives as well as the target capability for them and then my favorite part we took it some we took a look at some use cases unfortunately I only have a time in this webinar to show you one but in your download or the handout from this webinar you have eight of those things that will walk through knew exactly what I just did for that or use case I believe it was 2.2 that we did so we've got we've got some time here to handle some questions we have some time left over I appreciate your your your kind patience during this webinar but mark possible if you're out there if I believe we may have received some questions and if we did you feel free to throw them at me and we'll will address with this time yeah we sure have mark yeah thanks very much for that great stuff the the first one is actually things actually a trainer that might have asked this question so it's relating to the bridge is the trainer trainer module available obviously said the exam is so zoom in there's something for trainers as well okay so it was a me by bandwidth but it was coming in and out I think what I heard was is the trainer trainer available today and where do they find that full bridge yes okay for the bridge okay okay so for the bridge yes a bridge course does exist you can find that information a p.m. a PMG international and you can also find that on I sock up and on the COBIT site yes a bridge course is available for you that course can be done asynchronously through through recorded version as well as can be done face to face you can find that information out on ice on on a PMG site now the exam there is an exam for that as well the exam is done online this is not a face-to-face or for proctored exam by an instructor all the exams are being done online proctored for you so hopefully that helps Thank You about second question was about the the Cobra 2019 design canvas can you just recap a bit on that and um how we go about using that yeah absolutely so it's one of my favorite pieces and I know it was hard to see the design canvas what we were looking at at edit slide but if you download the tool out on the out on the covent area we're at aisaka so when you look at the design canvas it identifies all of your 40 governance and management objectives and then each tab in that in that in that file its each one of the design factors so as you click each tab what it will do it will ask you certain attributes and specific things about your organization for that design factor and then once you finish in inputting all your data that canvas shows you from a macro perspective the level of importance or the level of value that each one of those governance and management objective shows you so for example if you're in a in a highly competitive environment that that cyber security is a big deal and your company is focused on aggressive growth if you put the right information in each one of those tabs the canvas will show you which objectives are the most important for you and which ones that you need to have a higher level of capability on to be able to satisfy those so I like the canvas it shows you again it has some good visual pieces on their bark bar diagram as well as like a spider diagram that shows you the importance of those but as you change and it play around with the tool a little bit because if you go change one of your design factors it the the the inputs to your design factor it could significantly change the governance of management objectives that the tool is suggesting to you because remember each one of those governance and management objectives is associated with a process of a flex hawk um next one is on capability assessment so is the capability assessment in COBIT 2019 the same as the one used in COBIT five and why is the capability level placed near each activity for each practice in the governance and management objectives book yeah good question so um so this is an its I'm glad that in Kobe tonight 2019 we're now adding more maturity from from the CMMI model but if most organizations that I'm dealing with right now they've already gone through this in-depth capability assessment using the COBIT five process assessment Haarlem what I would suggest to you today is if you're still looking at the process that makes total sense right because I would still there's I do not believe there's any further guidance coming out on how we do COBIT five assessments but if you're looking at the capability level you're looking at the process and why now I believe we see this at the activity level is because for every one of those governance and management objectives right we have components okay and every component I can now look at that component from a maturity perspective and that maturity is a collection of all the practices and activities right that the support it so I believe that we look at a capability level at the activity which is right down into the detail because because once we kind of put all those together they kind of roll up into a maturity for me for each one of those four it's one of those components I know that may have sounded confusing but there's a lot of pieces to that so anyway to summarize that answer is yes I would continue using the capability assessment for for your process level and specifically down the activity level because we look at inputs and outputs but I would start looking at the CMMI model to look at maturity at levels above that for example things like my components so I'm not sure if I answer that question or not but I gave it my best shot tis muck so next what there's actually a couple of questions about the obviously five we have the implementation and Assessor levels so merge these two questions together so is there a change to the implementation and assess levels as well and the of a related question was so someone certified at both of those levels is there a bridging for those certifications in 2019 okay that's a good question I would I would say that if you are COBIT Assessor excuse let's start with the code implementation I say that if you were a covert implementation that is still valid the implementation guide is not significantly different in COBIT 2019 the only thing we've done is is it's been able to leverage a connection between the implementation guide and the design guide so I true believe I do not know that there is a Brit there is a bridging available for implementation from kovat five to Cobie 2019 I do know that there will be an additional certification once you pass or go through foundation there will be in disel course and this comes out in April as far as I know and it's the design and implementation course and I think if you are an implementation certified person this course you want to go through I would I would suggest not doing a bridge in fact I would I would even suggest to us akka this is not a bridge type of thing because there's such a massive change in how we're designing a governance system but there's not as much to change on implementation so to go to a new course that that blends the design and implementation I think is important so that's the first part the second part was on on certification around around capability assessment I'm gonna echo some things I said before that I in if I were you again I don't know your organization but if I were you I would continue to keep or me to continue to do the COBIT five process assessments based on the Kovac by Pam I do not know and this is this is and this is information I don't have I don't know if there's will be an updated assessment an updated course or updated certification around this my guess would be no because what we do understand is no further specific guidance is going to come out that that talks about the capability assessment so that tells me that we are going to be supporting the current capability assessment for quite some time so the answer the assessment is I do not believe there will be an additional Assessor at this time there could be something coming out but it hasn't been announced my Sokka so if I answered that I'd be making it up so I hope I answered that question great thanks mark there's a this three or four questions relating to CMMI stuff so again I'm going to try and combine them a bit so first bit is when can we expect the COBIT 2019 assessments assessment to roll out would it be based on CMMI version 2 maturity model yeah go ahead and then the second part of that will the Wilko be 2019 aligned with the CMMI cyber maturity platform yeah that's information I you guys know I'm an independent I'm not a nice Sokka you know I'm not a soccer employee those are those are strategic level things that I don't know and so I wish I could answer them same kinds of questions that I would have I do not have any information on any further guidance around the link between CMMI do you know that I will tell you that I'm a huge fan of the CMMI model and in those pieces but I that that question I just don't have an answer to my apologies for that okay and and this this one's related so may not be answered to answer this one as well but it is is it doing away with process capability assessments guided by ISO wonderful 504 you say that question again please so it's Kobe 2019 doing away with process capability assessments guided by ISO wonderful 5-0 400 so no so one of the things I mentioned before is is that no you can continue to use the capability assessment because that's where do we get the process level and actually it takes it down to the looking at it from the from the activity level so this so I wouldn't say that's that we're doing away with it what I'm what I my interpretation is we are converging the capability assessment with the maturity assessment with CMMI so I think it's I think it's more powerful for us because it's it's giving us two seven two models to look at but those models are different altitudes one is in the process activity and the process practice one is more of a higher level at the at the component level so yeah I think I think me personally I'm going to continue to use the Cobie 5 assessment model thank you Mark I think we get we're getting very close to our out now I'm so that's let's do one more one laceration does this mean that the COBIT 5 development has been suspended or slapped or stalked are the enabler guides or the seven our neighbor guides available for use by organizations are implementing a framework based on COBIT 5 yeah that's a great question and I go back to my original disclaimer that you know this is information that that aisaka would publish and this is information that I don't have personally but I would say from the enable of gods I will continue to use enable and guides because it's one of those enablers you might have noticed when I talked they we had governance components and those governance components were what we call the neighbors I personally will continue to use the enable of guides the current neighborhood guides we have around around any implementation of governance but I do not know of any of the intent or I don't know the plan on how those will be phased in the future so yeah I know there are a lot of questions about about I sock isn't debt that I don't have but I wanted to want to be very open and transparent that I'm going to continue to use that information great thanks mark thanks very much indeed you know very closely I went ourselves into wrap up there so we've got our information so I haven't we mark sweeter there we go fix a few links on there for everyone to check out while we close and and do look hopeful to follow up email as well so we'll we'll get onto that as soon as we can as soon as we've got the recording online and pulled the the various bits and pieces together we'll get that sent out as soon as we can that may not come today it may come on on Monday but do look out for that and we'll put as much information as we can in there okay so I think that's everything so to close about to thank everyone very much for attending I do hope you found it valuable and many many thanks of course to you mark for your insights and expertise today always a pleasure having you with us on our webinars glad to do it perfect so thanks again everyone enjoy the recipe Friday and the weekend ahead bye-bye

Simulation #72 Toni Lane Casserly – Decentralized Governance



boom what's up everyone welcome to simulation I'm your host Don sake on today we have the incredible pleasure of sitting down with Tony Lane Casserly hello thank you for joining us thank you for coming on the show really appreciate it yeah this is gonna be so much fun we're be talking about the importance of decentralized governance in our world yeah which is very interesting because we've had what like 200 almost 50 years of this u.s. governance and it's been like pretty good the Constitution's good but it's centralized and now we have blockchain we have all this technology that helps us decentralize things well it's beyond even decentralization it's more the idea that when you look at any kind of theory and the theory in principle and the theory in practice are so far removed from themselves that they're actually creating a cliff of divide that divide is actually going to propagate through the minds of people that are practicing the philosophy because what we believe democracy is or what we're taught democracy is if we're even taught what democracy is and what democracy has become in many instances in practice when you shift the incentives toward you know that of capitalism instead of actually like the humanization of what is meant to be the collective good the good of the Commons then you're fragmenting what you're you're fragmenting belief and in fragmenting that belief what people are doing is inserting the idea that belief is not belief in the functionality of the system belief is not the belief in the principle of democracy believe his belief in the principle that you associate with your self-identity and in fracturing that principle of you know here's you know are the good of the system and then here's my is self-interested good what happens is we pre create partisan politics and that's we know why we have these Republicans and Democrats and why people say I hate all Democrats because I personally feel pro-gun or I feel Pro you know a pro-life or whatever or I feel anti it either of those things in Pro marijuana and we say that because I believe in this certain thing myself that must mean that I believe in this thing politically and eaten in that entire train of logic right all people are doing from the minute they start saying that until the second they finish it's just them literally sacrificing their agency and targeting other people instead of actually looking at a systems functionality and questioning whether that system is living up to its principle and that destroys the the destruction of the principle of the system in turn has been destroying the principles of our own humanity so you know Aristotle didn't say like democracy is it he wasn't like democracy is like that's my life mate democracy he said of the systems we know that exist democracy is the best it's the best of what we know right but what if the best of what you know is you know I've only in my life ever shopped in a very small local Walmart and there are no local farms or what if the best of what you know is that you know what if the best of what you know is essentially something that's bad for you something that's maybe filled with preservatives or chemicals that you don't know about I'm not trying to dog on Walmart here I'm just giving an example of the way that you know the the underlying mechanics behind the way that we've thought about production and consumption have driven us away from the good of what is human life what is the good for human life and what is the good for my life right so yeah I mean it's all of this all of this symbolism is coming to a head and what blockchain really represents in so many different ways is our ability to to recreate and to redefine that symbolism and to say are any of these Western systems all right we haven't always used these systems right like how do you think we managed our societies in like Sumerian times like these super advanced civilizations like the Aztec like the Maya the Egyptians right they all have pretty similar models but their connection was always based on something bigger than what they are and whenever you're only focusing on what you are sudden you feel like you're very big and everything else seems like it's either very small where the bigger picture doesn't connect with you because you're not imagining anything outside of what exists just in your own very narrow perception so yeah I think what blockchain represents is not you know the idea of its it can represent many ideas but it's a technology technology is used by humans humans generally respond to the incentives we create for them so if we create better incentives in our technology then we can see a shift in human behavior if we change human behavior then maybe we're one step closer to peace but the healing starts in here yes the healing totally starts within and the decentralization is going to cause a good amount of healing in our future you mentioned oh as you were going there you said that we have this new sort of conspicuous consumption capitalism that's kind of taking over this ego is getting pumped up we've lost kind of this sense of the cosmic perspective on to our civilization these things all in play are kind of causing what we're seeing and then this whole polarization of taking this thought and associating it with ourselves to the degree of which we will actually refused to even empathize with the other person's thought because we are so in our own bias this is it's starting to get a little bit what we're experiencing a good amount of flux right now when all of a sudden Connie can just come on to Twitter and just be like yo like make America great again and and everyone's like whoa how that happened so there's like a bunch of things happening in the social fabric that are kind of disruptive and I want to learn more about exactly how we can how we can fix this with decentralization and how you're working on it's been a year at culture now yeah and that's going and there's differences for people too you were telling me about this earlier for somebody that's coming on to the to your platform now it's on to this decentralized platform that it's different for somebody that's a refugee that just had their home taken away from them and versus someone that is living in San Francisco that wants to get their voting record on the blockchain of their identity on the blockchain so this is much different yeah so I mean one Kanye West is a performance artist Kanye West is a performance artist Kanye West is doing what every major media agency in the world is doing who wants control what he's doing is he's playing with reality at a meta level that's what Kanye is actually doing he's messing with everyone's sense of reality in a way that is so unexpected that he has control every it's he has the control because you can't control what is unexpected that's the only way actually that a lot of people can either you can have control in that way if you're a persona because then you're a bit more impervious to some of these like targeted grassroot insurgent attacks like we were talking about earlier and in doing that way you're actually you're you're taking the incentives at a micro level that people are using to exploit media information and persona and you're essentially saying he's essentially saying nope and he's taking on that at a macro level and he's flipping it on its head literally saying I care so little about what people think of me because that is how they control me I'm taking what Kanye is doing is he's actually rebelling against that mentality and saying I'm taking control of my own life I personally think that Kanye West and Kim Kardashian are our broad-scale media geniuses and watching even watching the growth I mean you just have to really take a moment and step back regardless of principle or any of these things what they've done from a meta perspective or the evolution of their persona is absolutely remarkable and not that not that it ever would be but shouldn't be understated they're the genius that they both because that shouldn't be understated because they really are they really are shifting what people perceive as reality and there very few people that have enough control over it to do that yes so it's a it is literally a trip and what they're realizing is that what's happening is like it's it's it's literally like realizing that everyone around you is on opioids and you're like sitting up here you're in like some kind of you know ayahuasca but are like you know you're in you're in this you know lucid you're in this full lucid state and once you're able to take that lucid perspective over reality you're able to take all of the people that are asleep and hopefully shift them into something greater so culture is actually a movement that I've been working on for and that's what he does like he's saying that rather than being a slave to the culture that exists around me I am literally taking this into my own hands and I am just tired and at any expense right I would do it not that I would ever do things the same way because I definitely wouldn't but it's yeah I mean it's powerful right it's powerful to have that level of control over your own life especially when you get that big yeah you know so it's all you know there's a lot of it the strategic and then there's some of it that's just real and that's also what makes it so interesting I've been working on culture for the last like actually five to seven years that's how long you've been working on yourself just under different names and it's but you've been aware of blockchain technology for that long yeah bloch means pretty much been my whole life in career I found blockchain technology when I was twenty years old so I was staying you know politics economics my actual degree was in advertising and propaganda theory mm-hmm I noticed I thought that was super interesting propaganda theory yeah which is what we're gonna talk about in a little bit also with media for sure yeah oh yeah and then within the framework of that propaganda theory I was also studying politics economics and philosophy I was basically just studying I was in college but what I was learning was I used colleges of resource so it's not like I was like oh I take these classes so I only read these books like I just go around and get syllabi for different classes and different reading lists and I would just talk to people I just talked to professors and I'd read stuff and I've had questions and I'd ask about those questions and I'd figure things out so the quality of your life Quadra questions yeah absolutely absolutely and so and it's also if you have resources at your big questions if you have researched by the way talking about hacking a simulation we can definitely get into that mm-hmm well even globalization and wealth inequality and AGI and bio warfare and how do we maximize human potential all these freaking questions that all these different diverse leaders in their different fields let's test your perspectives about them let's get these thoughts to the world let's inspire more people around the world to have these conversations because what are we going to do in the future how are we gonna have these children be birthed in the world so yeah what the importance of this deep question and the importance of blockchain technology to where are we going yeah and yeah I mean I think these are all questions that can't be answered and they can be answered individually from our perspectives but the future is determined by all of us yes you know and so yeah some have more power and control like we were just talking about with Connie and Kim well it depends on how what is the level of I don't want to say cosmic awareness but it's really like how broad and how high how meta is your perspective like how meta can you get in terms of the way that you perceive things because once you're able to take who you are it's self transcendence and remove it from the equation you learn a lot more about what's actually happening because you're not trying to process things through the continual framework of you you're removing you from the equation and in removing the idea of your own self identity to kind of riff in the opposite direction of what I just said when you're actually removing the idea of your relationship to yourself and your ego from an equation in a way that allows you to transcend what would be your normal perception you're able to take in reality as it is it's like the glass isn't half-empty it's not half full technically the glass is always full because half of its filled with air but you're literally looking at the glass as interest is it is a glass there is water in that glass like this is the state of reality and in understanding that state of reality you have more power to create a state change you have more power to shift that because you're not perceiving things through the framework of a perspective your understanding that the sum of what I am in my existence in my perspective is an illusion of memory that I have built over the course of my life that I have lived and imagined because it's every time we try and remember something you know where our memory really exists as dreams because every dream that we have if we're exploring within our own consciousness is created of the framework of the memories that we have stored in our physical bodies otherwise all we would see is energy other if we were just using our dream body and our spirit body to traverse across the world in the universe all we would see is just the color of energy right in these interactions and like these frames or these vignettes but because we're living in an environment where we actually have a connection to the physical world that's the only place memory is ever real other than that it's the idea of your existing in a period where your imagined memory is based on what you perceive is true to you and what you perceive is true to you could be based on something unprocessed you could be perceiving truth based on an unprocessed drama and then continuing to create that truth because you still haven't connected with the Godin you you know so it's really important the foundation of culture is actually based on the idea that we as a society have to incentivize self transcendence yeah as a philosophy yeah if we're not going to have peace inside of ourselves right at the top yeah we can't have peace anywhere else well I think the shape is changing right and that's the the other thing that if we talk about like shapes open people's self transcendence they don't even have their base physiological needs met right that's got out we'd be this easily have you been to India I mean they say in India there's a lot of pain and very little suffering because they're men like my friend told me this story said I was walking down the streets in India he was doing this project for social good and he says I see this man he's like Harriet like Braille thin like ribs everywhere just you know big old beard and he's got a child with Kennedy's missing teeth and it had just rained and they're laying in a puddle and they're and they're loving each other and they're rolling around in this water because it had rained and that meant that they could have a shower they could have a bath and they were joyous mm-hmm right and that's because they have reached that place of self transcendence because the spiritual culture there is very very very strong so you can reach that place no matter how much you have you can come up from you can have with them when they have an issue with their health it might be more difficult for them to get an issue with their health or maybe his child's issue with his health you could lose a child earlier due to improper attendant tending of their health and also to it's very good to be spiritually connected enough to be able to role but in the puddle so this is so it's interesting that you bring it up this I totally agree with you but I also want to see there be some sort of the base as well yeah yeah and I think that that's going to be generated using blockchain as a tool once information can be quantified we will understand that it is value once we can quantify all forms of value we can actually create wealth see time so so there's last about five years though of going through this process of figuring this technology out and trying to bring it to our world so the technology came to me really early it wasn't about figuring it out it was finding it and feeling like the questions had been answered mm-hmm because I was looking at the global economy going we've been printing more death and we have wealth for like 50 or more years Venezuela is like 15th on the cia's and one data for money supply and they can't even stock that grocery stores with food this is not it's not even that it's not sustainable it's that the illusion has gone so far that the fracture in reality something is gonna happen mm-hmm you know and we had to have there's got to be there has got to be something else like there's got to be an answer and watching I believe in so many ways is that answer so when we think about it talk about ideas like the infinite you're like universal health care things like that so if you think about DNA like DNA is a storage molecule mm-hmm and you have like processing elements within your body like the amount of transactions my body is making since we've been sitting here is like you know in in the in the billions trillions however many transactions my body's been making since we've literally just been sitting down for this interview and if we're able to actually look at our body as a source of information right what is because what is blotching actually like what is Bitcoin it's just ASIC chips that are mining and solving super complex math problems that increase it exponential rates and once they're able to find the answers to those problems it's actually generating its therapy or know they're getting Bitcoin for having solved that problem as a computer you've got a decentralized digital ledger yeah it's a it's a decentralized digital ledger and in being a decentralized digital ledger its quantifying solutions to information problems our body is literally just information so let's say that if our body is solving if we are solving problems in our body or we're using our body and the information in our body to solve health problems it's the idea that what if you had that with the people who have really rare diseases are actually really valuable because if we can figure out if we can use or cross-reference their own biological data with the other basic biological database of other people we might be able to find a solution and a cure we might be able to eliminate within within the next century we may be able to eliminate disease mm-hmm right so just the way the information is reacting within our biology if we could at least log that on the ledger and then be able to analyze the trigger of the pathology so many people have been on the show talking about biotech and we love that those conversations there's so many other applications of putting things on the digital ledger we're talking about voting earlier identity property marriage there's so many things that can go on there and there's so many cases of people losing things that are theirs due to there not being a paper trail of it being theirs and who's in charge of the paper trail it's a scent and when it's a centralized paper trail all of a sudden it can disappear with a little bit of lobbying a little bit of politics any of that and that's that's that's unhealthy for someone's yeah you know it's a serious serious transition that we're in okay so now it's been a couple years of analyzing this and embodying it as your you know truth of how you see the world and how you want to solve a lot of the fractures that we're experiencing I kind of want to talk about the fractures a little bit more because we're talking you talk about solutions in the fractures as we go but yeah this this fracture of the media that's going on and it's nice because we're both classify ourselves as empaths you went to 30 straight days of meditation Asia I went to 310 days of meditation it's been one of the most profound experiences of my life and it's helped me really tune into another person's being that there's a fullest being and my own fullest being and so in doing that I have learned that when I see people be so polarized I try and stay as calm and quantum as as possible try to stay open-minded trying to stay loving and caring ask really good questions and so what we've seen is we were talking abouts a little bit earlier but this whole shift in people manipulating the fabric of the media in order to gain their own power agency their own agency agency it's actually and that's the the scarier thing the scarier thing is that we have some people manipulating the media at the the mere attempt to just gain their agency because we've created a world where you have to be a certain way to be successful or to be a man or it's be a woman and all of that is utter BS it is absolute and utter BS you don't have to be anyone else's man but your own man you don't have to be anyone else's woman but your own woman and anyone who tells you differently they're afraid don't buy into it people will try to sell you fear everywhere you go it's not worth it it's not worth it it's not worth it to make that kind of a deal just let it go just literally let it go yeah I mean the fractures are in some ways I believe that it is our duty and responsibility to heal these structures and that's another core thesis reciprocity and restoration are two of the Cora thesis is underneath the technology that that we're working on and it's the idea that if you look at the governance and the boxing in space right now Bitcoin forked because of a social fracture because of a social political fracture and also because of grassroots psychological insurgency because we had paid trolls come in to the reddit community as early as 2013 Manning 5200 reddit accounts when the community was small and going in to empower essentially the voices of trolls and in doing that start to fragment the community from within itself it's pervasive it happened everywhere because it was a study of reddit is do they know yeah they're I don't know I haven't called Alex or something but it is their claim that 5,200 you know this was not someone from reddit I know yeah but but reddit analyzed the bots accounts this is no no no no no no this was so this was a report there's the best media publication that ever existed in the Bitcoin and blockchain world was a publication called coin fire they were real journalists and that's why they got attacked they actually had someone tried like DDoS like they were just trying to shut them down it was coin fire was the most authentic high integrity publication that existed in our industry and the site got shut down but the reporters are still out there well and they had someone they contacted me about this story because I you know co-founded and was the CEO of coin Telegraph and they therefore the first operational CEO ever and they called me and they essentially said you know like we need help we need help and I'm like what's going on and they said you know we're being attacked right now because we're we're getting this information and we're releasing this story and I was like alright we'll tell me more and the story that came out was the most it was one of the most remarkable things they had ever seen or read it was just someone who felt guilty it was literally and they had been known for being the most high integrity journalistic publication in the industry and someone essentially just contacted them and said I will give you the logins and the passwords to all of these accounts and they gave them it was they gave them the passwords and logins to 50 different accounts they've been some of them purchased some had been operational for eight years yeah they had all been posting so there were posts it looks like this was a real person because at one point in time they actually had been right and so you don't know like it looks like oh this person's interested in like they have automated posts in life makes it more difficult to tell if they're a bot or a human they were but that's the thing is that these aren't BOTS they were operated by humans these 5200 no these are not robots they're networks of psychological insurgency that are built by real people that are Manning fifty to a hundred accounts on reddit and have purchased accounts from other real people men women different backgrounds different interests and are maintaining a normal posting schedule there and then using that same voice to fragment the Bitcoin community this happens to Reddit this happens through Twitter this happens through Facebook the number of people that are like it's you know that if you just accept every person who oh you yeah well it so many pictures of freaking women in bikinis trying to add men right now it's ridiculous and I'm sure the opposite is true for women getting tons of men as well for in men these profiles you click them open they're from some random City they might have a mutual friend or two of yours because they've already accepted the request but they're trying to just mine your information yeah and manipulate you through their social postings that say things like oh this certain news is being propagated and then you click it open it's some random site that has no actual authentication and all of a sudden that's what we're seeing more and more of so who's doing this who's doing this who's behind this why are they trying to manipulate the fabric yeah what's their incentive what do you mean why are they trying to manipulate the fabric because it is the most powerful form of what people are trying to control or the actions of other people I mean this is actually warmer it is in because the the war that they're waging is in your mind yeah there's no more powerful form of violence than violence that you are responsible for that's that's the ultimate form of an accountability especially when you don't know that it's happening to you that's even worse for those who are causing the violence it allows them to remove or revoke any kind of accountability that they have in the situation you go through seven other people to hurt another person and the way that that person actually gets hurt is that they hurt themselves or they hurt someone else most people who do that aren't even aware they're not even aware that they're becoming violent that they're either going on these you know they're going on this like whole train or they're like wanting to you know they're spewing hate speech or they're doing whatever where they feel like they they hate this other person and they want to fragment the community where they feel like they're at odds with someone and this person is their enemy and that's by design it's not actually because this person is your enemy it's by design it's because you're being manipulated by everything that you don't see and understand but it's getting to you because they know how to get to you that's why you can't even read don't even read it's don't don't even engage I don't I don't I barely use any of that stuff yeah yeah and if I do I like don't it's just really don't even engage with it no I mean I don't for the benefits of vocalizing your perspectives to the world which actually helps a lot to put good content at the sphere a lot of times I hear people say that I'm not using social media anymore because it's just too much of that nonsense but then I also say that you are a brilliant person that has a lot of wisdom to communicate to the world if you just took those little bits wisdom that come to your mind and post them across Facebook Twitter Instagram LinkedIn these major platforms and just posted it there and then just let other people read it and see it they would be like wait there's actually good content on here too and then we could over overturn that as well I want it I want to ask about how what you're building is restoring that media fabric and this and not enabling the fracturing to happen so easily well I'm not actually building so I can tell you how it should be done it's a platform that I created you know it's it's like I can tell you how it should be done I actually have a few talks that that mention essentially here's the solution to this Jesus but that's not what I'm working on because I'm working on something from a different perspective and a different angle it's just about being aware that these are the real problems and this is these these are the real political issues that are affecting citizens as well the holy their baby they're way bigger and broader issues than that but these are the ones that are at least in our control what were your talks that you give how do you get the awareness in though just from that point before we go to what you're building what how do you wear nurse and other people how do you get the awareness in so that people maybe stay skeptical or stay super analytical don't get driven by those emotional signals that come through the you need to ensure self transcendence I mean it self transcendence you have to be so aware of not only it's not like what you are and what you are not you just have to be so aware of our relationship to existence from a cosmological standpoint that you're able to take a God's eye view on some of this stuff because that's the only way you're gonna that's the only way you're gonna make it through yeah if you start looking at things super myopically and you start focusing on the trauma you start focusing on the pain you start focusing on the anger you start focusing on the sadness you're gonna it's it's just gonna keep existing because you're focusing on it if you focus on the pain the pain will continue to exist if you focus on the light if you look at things that's grinning I'm not saying it's not like I'm perfect and it's not like I'm like I always have this active and I'm like unaffected by everything like it's not that's not the case I'm the person and I just try to maintain it's in the past like I've you know I've seen a lot of things like that and I hear you with the self-transcendent perspective yeah I just have to keep checking yourself yeah it's it's a recently posted about the importance of the mirror the importance of really looking in the mirror and focusing on self growth and being very careful and being like I actually don't like that and then working on it and being okay with other people critiquing and being really driven to to work on oneself okay so how about what you're working on with Chris Allen so tell us a little bit about this this is really interesting so web of trust is essentially and so the company my company is called culture and the foundation of the work that we're building is essentially universal access to legal contract rights outside of one particular jurisdiction and a shift in our relationship to identity as something that is stewarded by a community instead of 'no psyche owns as a biometric or something like this so web of trust is an open source standards running underneath culture and culture is essentially the ability for you to register your identity on web with trust you can register it on like civic or Junio order through Facebook and social media or whatever right and you can pick and choose which identity if not multiple identities you want to use to interact with the world and then you essentially have access to all of these different blockchain applications and landscapes so I can have multiple identities this is and this is a philosophical question that we can get into right whoa so with with web of trust it's essentially the idea that you're now we can get really into that conversation because that's a philosophical debate I have to submit a DNA sample per personality it might get that extremely well and in a digital world might be the only place where you can have an anonymous identity let's hope it doesn't but it's it's already but then but then how would really if I could take five different personas and identify them through through a platform then we're already experiencing a little bit of fragmentation of sorts because whatever the four ones that aren't this good standing one could do whatever they want with the plow so what are you quick ly though on the philosophy behind that would our yeah so I mean and this is a tricky and complex question because there's the idea that you should only have one identity like that's basically Facebook's stance it's like you should only have one identity I thought about this last night like I got into a deep sometimes I get I just write and I get into like this deep conversation with myself about our relationship to identity but it's the idea really in our system that your identity is stewarded by your community and your identity is not only relative to your identity but what's really important about your identity when you're participating in different communities and cultures is your decision-making power so you might have a bunch of identities and then of those identities may have decision-making power in any of the cultures of the tribes or the communities that you interact with so should you have I mean this is not here's the thing like it I don't I don't know if that something I feel should be just like there are certain people like activists so for example so to give you an example of where this would be important interest so if I'm living in Uganda and I am a you know let's say I'm living in Uganda and I'm gay and I want to marry my wife because I love her and there was a period of time where you got I was trying to pass a bill fueled by the way by Western fundamentalists who came to Uganda like super like hard-line Christian and they essentially hardly I don't want to say Christian activists but I think that's probably how they would think of themselves they came to Uganda fuel to hate movement and you gotta try to have passed they kill the gays bill and so they now have an anti homosexuality law where essentially if you you it used to be the death penalty and now it's literally life in prison it's that bad so if I'm living in Uganda and I want to get married anonymously and have my community verify it maybe gain access to some services or some rights or some anything some whatever you know collaborative governance marketplace can provide for me then I actually can't I I'm putting my life at risk okay if I have a public identity and I'm saying that because the world has not reached the level that you're at the rest of the world has not caught up with what you've reached okay you got it maybe either give them some time or like figure you have to essentially figure out a way to there are people are already living is to life so so there's a good way to leverage five fake personas that you control to try and increase the amount of conversation in Uganda around Pro gay marriage no that's not what I'm saying and it's also the idea that if you have an anonymous identity and that anonymous identity isn't having any kind of interaction you can be banned so like if let's say a communities organize thank you legally gay married with an anonymous identity yes when I'm when you use your anonymous identity you're not necessarily using an anonymous identity frequently to interact with the world but you'd use your anonymous identity to register different contracts anonymously that you and your like social network can verify or the you and your partner can verify so you can have legal access to a system of contract law that exists outside of the bounds of a jurisdiction that may try to oppress you for owning your rights right so there's one really important yeah right there that's the highlight when do that's the reason why when a jurisdiction outside of use trying to oppress you in some way you then have the ability to privately put something on the digital ledger securely over time and and that and then you're on publicly you can do go to the grocery store etc because that's not oppressive of sorts yeah that's but can you continue to keep like if you're using like these identities first of all like they're all stored in one place right and you can have one identity like your civic identity as a public identity where you need to follow KYC naml laws and you need a passport you might have another identity like through web of trust where you're a refugee but it's the idea that all of these things can be transparent and linked and you can see when someone is using an identity that's not a transparent identity so you might immediately see like hmm okay well this person who's trying to interact with me I don't know them and they're just using an anonymous identity so if I'm a journalist I might say this might be a tip right from an anonymous whistleblower but if I'm just a person and I'm interacting with another person and they come to me directly just anonymously I can say no like or maybe I'll let like one message through but I can say like no like I don't really want this anonymous person with no reputation or no identity to be able to contact me like unless they are you know doing this or this or this so the way that that works is essentially if you have an anonymous identity and you want to connect with someone you need a party of trust so the way that this is outlined even in the white paper for Amira that's written for the web of trust foundation is that it's the idea that Amira is an activist from Syria who was a child bride that escapes her abusive husband who has a position in Syria and regime she moved to Boston she has a job at a bank that's a normal job but she wants to give back to the world and so in wanting to give back to the world she engages in the situation where she sees this guy on TV and she's like wow he builds like he's building this app that's gonna shelter women that have been physically abused to really want to contribute but she can't contribute thank you she can't contribute with her own identity because she doesn't want to be a rich doesn't wanna be found by the regime she doesn't want to be any of these things only she contributes with an anonymous identity called better world hacker 23 but how is he even worked at the bank without showcasing her identity she's Social Security number she's these things production I mean this price I mean they can be it can be different kinds of things and you can also I mean the assumption in this case is that they would be looking for her and then and with this kind of heritage or background it would be someone that would yeah so okay so this is about protecting one's own health as well from for having this independent agency to move away from oppression somewhere else and then not be under the attack of that regime but the important element of this is that if she's using I'm not talking about that identity the identity that I'm talking about for her that she use our system for is the anonymous that she would use to essentially say I don't want to use my public identity because I feel I could be at risk so the only the way that she connects with him like she could reach out to him using her anonymous identity but probably have like low latency so she finds a mutual friend who knows him that knows that knows the guy who's running a non-profit and the mutual friend essentially says ouch for her there would be a lot of connections and say yeah it might be right I can vouch for her and say it's gonna be complete the system is trail of vouches for the person you can you can have a trailer like the six degrees of separation or connection and you can say well I trust this degree at this level or this person at this level so you can have this person essentially say Charlene introduces her to this guy Bob and she says I can vouch for betterworld hacker 23 and say that better world hacker 23 is like an excellent programmer and so he says okay well let's engage in this agreement and I'll you know for the first month show me that you're a good coder contribute work to this project for free then they create an agreement then once he says you're a great coder she gets to continue to contribute to the work because he says okay she's right you are a great coder and then what happens is he starts building up her reputation for her anonymous identity okay so it's not like anonymous identities exist in a way right now what's happening is that we have anonymous identities that are able to proliferate at this regard because there's very little accountability but if you place an anonymous identity in the hands of a community that's stewarding it yeah then the model shifts because you're actually saying my identity is not just my identity my identity is the way I exist subjectively it's also the way I exist objectively my identity is the communities of reference that I associate with and my identity is also the skills I have to offer the world so you start to get this portrait of who a person is that's beyond just one the sum of one username or handle you're actually saying I exist as a process of the way in which I relate to the world around me and in that way once you're able to gain perspective on that we're moving people closer to the idea of what it means to take this kind of God's eye view Insull transcend so it's it's the idea that we really once you change the model to community stewardship a person who is seen or perceived it's being anonymous you and you might say you might feel comfortable talking to anonymous people oh you might probably and you might say yeah sure like I don't need an anonymous profile as well I have things that I'd like to contribute outside of the the social fabric that I think would be very very inspiring that other people should hear but that I do choose not to right now as much of an open book that we are here there are many things that we just cannot say on the program that we would like to say is that right yeah I've got nothing died no I don't care I don't need to be anonymous interesting so then there's people that don't care at all about anonymity and then a lot of most people most people don't at all those people want most most people have known me my god I would publish the most crazy medium post about civilization design if I could just be totally anonymous topic I mean I'll probably say my anonymous friend asked me to be like I wouldn't I would never have an anonymous identity because I just don't I'm like so full I would never have for me I don't really have a need like I'm transparent like I hang out with my I say this is like a joke because my I'll give my friends passwords to my stuff and I'm just like here you go I'm like here they're like oh do you like want to unlock your phone and I'm like there you go and they're like people are kind of taken aback and I'm like listen I don't care if you I don't really have anything I hide I don't care if you read my emails just as long as I'm consenting as long as I'm consenting to you doing yeah that's one thing but if I'm not giving you the consent then there's a problem and that's really what the our relationship to anonymous identities is gonna be based on consent and it's gonna be based on community stewardship so you have to consent like you can say as a person through this identity like I consent to receive messages from any kind of identity any anonymous identity should I consent to allow anonymous people into our community but it's that layer of consent and you're starting with that layer you're setting the balance first and you're setting the boundary so if you're like you know I'm I want people in my community if you can't be who if you can't show your real identity or you can't have one who's in our immediate circle vouch for your identity then that's an access point that we're gonna put over here and you can be a part of those communities that have these different standards but if you want access to our community are we have these requirements for access it's kind of like you know being an accredited investor so let's unpack the example again because I think it's really important to do so so we have a woman that may have fled an oppressive regime that now works in within the United States with a public identity just working normally just in case anything happens but she finds something that is very inspirational but that could get her in trouble so she finds a private identity and anonymous identity and starts working with that organization through a connection network that enables them to say okay we trust we trust we trust okay sure start coding okay coatings good enough maybe she starts getting paid by them she starts contributing to them that's good stuff so that's an example of an anonymous use so there probably will be uses of this anonymously and this profile will get built up and so that's really good so that's is that would you say that's your primary case example of culture of the importance of what you're building so I'd say that's the importance of of web of trust web of trust is free web of trust will always be free it is an open source standard for people to own their rights sovereignly outside of the bounds you can use this for refugees of a particular jurisdiction so if a refugee wants to gain right now essentially the the process for immigration is a lottery citizenships basically a lottery you sometimes money helps yeah money helps with pretty much everything and but if you're a refugee and you don't have any of that it's basically a lottery whether or not you'll even get chosen so what we're actually doing is saying listen we're creating this open-source research and development institution and this is helping everyone make more effective decisions because you can actually see if you're letting a person if you're saying well I want to let this person into my community or into my like you know property or my country or whatever may be a country that exists maybe a country that you create then you're able to say okay well I can actively see this person as a part of these communities so we share some common ground over here and there's I can also see that this person has these skills so interestingly ties into Trump saying that he wants the best refugees are the best immigrants and not just whoever the hell wants to come in well the immigration process is absolutely if it's horrible across the board this is why you have people going into new nations and like I I went into Denmark I think about a year ago and I was like what because I hadn't been back in like a couple years and I went there a year ago and I was like oh my gosh I was like I called one of my friends and I said what's the deal what I'm like what's going on I was like I've never in my life seen a homeless person in Denmark oh wow I've never seen a homeless person in Denmark and she said you're not gonna like the answer and I was like I don't know I was like well you got it I think you gotta tell me why what is it and she said they're refugees they're refugees and it was just so I'd never had someone approach me on the street and ask me for money in Denmark just never and so it's also a process where even these nations that have like these incredible you know programs in social democracies or things like this and essentially like the Roman flag is like unity through division it's like this big cross and then when you look at all of the scandic nations they're all basically the Roman Empire leaning to the left and then Jesus is like the Roman Empire at the pinnacle of power meaning one is greater than the other I mean all symbolism is literally everywhere and so yeah and so it's one of these situations where if they actually were able to understand listen okay here's this refugee and they have skills as a carpenter they speak English they have effective skills as a teacher they've been teaching people in refugee camps we have these forty people they grew up with who can verify that they had this job where they did this thing then they're actually able to see okay not only or can we like admit you but let me like actively place you into a job yeah let me like get you a place to stay with people who you share a common community with that are willing to open up their house and then let me help put you in a place where you're gonna actually be able to meaningfully contribute to society in a way that you're skilled or build your skills yeah and so connections so important yeah it's huge yeah because you know we a lot of people are coming into these environments where it's like imagine if you're new in a place and you don't even speak the language and you just like lost half your family and you saw your house get bombed and you come into a new country and you're like you don't even understand that you have to pay to write you know do I pay to ride the bus so guys you not been on a bus I don't know what this language means and you're alone and it's like you're any any person you when you go into a grocery store you might have taken in everyone you look at you're like no one here understands me everyone is staring at me I feel like I'm being ostracized you're just walking down the street celebrating my culture and I said I actually proposed the solution at a broad scale because people were talking about this and we were all concerned and I said have you ever like considered that maybe we should just throw a giant party and everyone was like this was in like a government office everyone just look to be in there like go on and so I said you know have you ever hung out with someone where you're like you've got this totally different background or this different experience and the way that you bond is that you just share something social and meaningful together yeah like when I went to college a drink or an event or but beyond is is celebrating someone's culture like when I went to college we celebrated Holi it was like everyone's favorite day of the year like you see all of these like Western kids that have never been to India and they have all these like they're like got the typical College photo of them like covered in the Holi paint dust right from the celebration of spring and in that way you feel like this you because you've had an experience with that heritage you feel connected to it yeah and so I said have you guys thought about going through and actually taking the holidays or the celebrations from this culture and just celebrating them throughout the city organize a big party because then people are gonna have empathy because they're basically like oh I've I've not only broken bread with this person but I've broken bread with their tradition yeah yeah and it's beautiful it's like you know you where you will show you what Christmas is like – right so that's the the foundation of this is really about humanizing our relationship to each other and placing ownership more as a student – a stewardship role taking the attitude of developed nations and actually uplifting what's meaningful about First Nations about indigenous nations right because if we took more time to steward our planet and the people that were in it I think we'd all be a lot happier healthier and way more connected adding someone as a friend on Facebook doesn't mean you are connected means you're linked yeah I liked how you said that's not just about breaking bread but it's also about breaking into their culture than breaking into yours and doing something to ensure that across the planet we always think that is it really gonna take a an alien race identifying one outside of Earth to finally realize that we're all one here I hope it doesn't take that long until we really figure out how to work together and help each other so so alright let's cover the examples of let's do this quick because I want to get to a couple quick questions before the end let's get to the examples of the influence that culture is having in in identity we did we did identity with anonymity and non anonymity and then how about voting property all this other kind of stuff what yeah so are these the other major uses property marriage contracts education certificates basically anything that you can register is a universal registration system the original function of the nation-state was essentially just that like I was basically the function of jurisdiction it was a way to organize things because we had tribal kings who essentially organized things with their memory so you remember what I said about memory earlier it's like the tribal Kings memory isn't perfect or it's not it was paper Ledger's sometimes yeah I mean then it's like oh well and then it moved into kings and queens where it's like Oh everything's organized because I own it oh so we don't even have to worry about that and then you made it into and then we make it into nations which nations essentially say well we're trying to give people different forms they still have kings and queens basically like you know the Kennedys but it's or like regimes is used in different contexts but it's a regime and yeah it's it's the idea that you're giving everyone access at least to buy a house or to do a thing and you're giving them a kind of ownership over their registration which is controlled ownership so what we build is Universal registration where we're all I'm also wearing it's my necklace as well you are the logo yes nice you got one of those I'll get you something that's cool yeah we should hang one up in here yeah let's do it but it's also the idea that you're you're now having the universal registration we're putting jurisdiction into the hands of every person on the planet as an individual and the way in which we look at ownership isn't just the idea because it's like if you just register a contract on the blockchain does that mean anything like no but when doesn't mean something when people are organized that's when it means something whether for bad like I was talking about earlier with those psychological insurgency networks are for good to give people access to their rights and ownership over their rights we can use that evil for good we can use that evil forget that's part of the foundation of the system that we're designing and so yeah that's it's it's that's what's core to culture and then on top of culture is a really dynamic ecosystem for new forms of access economy and community because the future of government is not government the future of government is culture yay nice nice so it's good good all right now we've touched on at least an okay amount of what we've needed to touch on about your background and about what you're building into the world and importance of it so how about a little bit of simulation questions so let's ask you about I'm interested to hear your thoughts on this one we're approaching an age of massive information technology across biotech and crypto and space and AI and robotics there's so much technology and it's kind of exacerbating the wealth inequality and we're now getting close to about eight people have as much wealth as four billion what do you think is going to happen with that gap of wealth and equality how do we help that and then also what's going on across the world with these technologies with the China Russia us equation yeah unpack that a little for us with your thoughts yeah so I mean there's a philosophical way that we could talk about ideologically how this could work and then there's the reality of the idea that all of these countries might try and homogenize and control their own things so okay which one do you lean more in the direction of it depends on how organized people are frankly and it depends on how much we like to play together rather than separately yes exactly united we stand legitimate I hope so on earth I hope I hope so yeah for sure I hope so so addressing the idea of this kind of like emergent well I mean the this is by design as well you know we have a third world country pretty much in the United States mm-hmm drive through San Francisco if you'd like to question whether or not that's true yes sixth and market just drive through I have seen through maybe like I could I could take you to at least five to seven side streets that are literally probably actually more than that that are literally just homeless villages yeah they are started making is that of like like like shanty structures fancy structures outside of like wood just basically wood tents or things like that like propped up with sticks and there's there's a hole there's hold there's 10th row there's Hazzard Needle depositories San Francisco spent 30 million dollars this year cleaning up needles and feces from the street yeah and then you have Rincon Hill which is right over there by the Bay Bridge where a condo costs 25 million dollars rent for a one-bedroom apartment is five thousand dollars if you factor in what the salary is for most Americans and how much it costs to live in San Francisco you you wouldn't be able to eat living here so yeah I mean it's a obviously a very serious problem and I think the way that we solve these issues is by giving people access and I think that what's gonna happen is all of this information and like people talk about the foundation for ubi and the foundation for ubi is actually the quantification of information and the individuals ability to take ownership over their own data because your data is a resource like I was talking earlier with your body whether the data that you generate is content whether the data that you generate is your biological information maybe you have a very unique eye color maybe you have a very unique genetic patterning where whether the information that you generate is measuring the quality of the air in your area maybe the information that you generate is living in Africa and you're using your cell phone to take a vr like essentially using your cell phone to scan the world around you in a way that runs it through a program that can immediately translate it in real-time hopefully into a virtual landscape so you're essentially creating the empathy machine by just showing people this is what it's like in rural Sierra Leone and maybe that's a form of you're contributing meaningfully to society or to a project so the way I think this will play out and this is really good for your data yeah for anything we've been talking about ubi being the data being the source data you generate being a source for ubi as long as people actually pay you hopefully hopefully we get well the systems will be designed that way and if they're not designed that way then if someone said you could get paid for this or not get paid for this you would take the option that said I would like to be paid for it it's really that actually simple especially when the information is stored on an ax blockchain in a way that can make the information anonymous just just as information right the only people who would have access to the information would be intelligences you can have a network of decentralized artificial intelligences that are running on top of this network and they're essentially looking at the information as our relationship not to our subjective identity but as informations relationship to other information yeah and so if you needed subjective help you could have a personal AI that is specifically for you all of these AI should be decentralized consciousnesses we don't actually do no damn daily from synapse I know she's definitely yeah but we don't fear AI we fear the centralization of power so if all of these things are decentralized they're solving problems together rather than saying like all AI is owned by one thing that's what we fear because absolute power will be absolutely abused absolute power destroys absolutely and so if you have a personal AI it can know who you are and then all of these other AIS can be invisible processing information and mining meaning out of that whenever AI is just like whenever an ASIC ship solves a math problem and that math problem generates an answer and that answer generates meaning in the meaning generates Bitcoin where essentially we're changing the process of we're going from like I said its value and information into meaning through meaning and wealth wealth and meaning right so whenever we're able actually generate meaning from that information then we can have the distribution of wealth and we're all generating meaning all of the time in pretty much every moment and you have access control over how much of your data that you want to give out and then there's these benevolent AIS that are running to figure out what is the meaning coming from the data okay so this is potentially a solution to the wealth inequalities people actually getting paid for their data they're contributing whether it be your biometrics or whether it be taking that VR video within yeah within a specific place in the world or any kind of generating content like what we're doing right now like attention yeah I am every every variable that exists in the world time our relationship to the way we move through space perception attention meaning emotion reaction our emotions our information the way that I react to us if you say something to me and I react in a certain way that's actually meaningful information yeah if you react calmly if you react calmly versus if you react agitatedly yes that's very important information especially for when they test astronauts for the International Space Station cool or even growing from that what might actually be valuable is that one time someone says something you and you react in a certain way and then another time someone says something to you and you respond differently and your reaction to the situation shows that you've grown so all of these things like the idea is like also that the amount of information we're processing so constantly people think that information is like what is seen like you put a blog post out like that's doing something like that information is what's unseen as well that's really well said yeah yeah because the the exactly your reaction if you've grown as a human through your reactions that's that's or if we're doing some natural language processing on your work and we're seeing that you're writing about things that are maybe a little bit more higher level you've been reading you've been learning oh you get a little more money for your data good job the invisible information economy will generate infinite well mm-hmm I like that all right let's let's jump you into do you think we're alone in the cosmos I don't know what it means to be alone I think that all forms of consciousness are connected I think the cosmos oh so the question is interesting for me because the cosmos are a consciousness so the very relationship of the language in that question to its answer are at odds because are we alone in the cosmos like the cosmos our life there a consciousness themselves just like Earth is a conscious are there advanced civilizations roaming the cosmos the Kosmos are in an advanced civilization in and of themselves the cosmos there are higher are there more advanced civilizations than ours roaming the cosmos it's it's the same relationship the relationship we have to the broader higher consciousness of the cosmos is basically the relationship we have to earth it's like we're right in the middle of these two four and they're both pretty benevolent right and so if you look at earth it's like if you there's an experiment from Harvard it's like one of my favorite things to reference in terms of people saying I've had people go like Earth is a consciousness like Doug sounds really and I'm like the if you speak to plants differently mmm they will grow differently you play different music if you look at a plan you like I hate you plant and you look at a plant you're like I'm they respond yeah the earth is a living breathing organism that actually created human life but from space you can literally see the ice caps melting and they're sure making snow and melting snow it looks like breath yeah even though Earth created us she's not the full source of life we are more of the cosmos than we are of apes we as a human race were more aware of the cosmos than we are apes yes yeah okay sure but it also seems as though we're all of that at the same time though but I wrote a haiku a while ago and it's the tides of life are a cycling progression meant to merge man and God yeah that's good I like that haiku that's a really good one yeah so I think that what we're experiencing as a consciousness is we're essentially just spiraling upward and outward and like art here's what's happening like our consciousness was here is like this little dot and our consciousness is going like this and then it's just continuing to expand until we reach a point of expansion that can compare to the cosmos so it's a big galaxy forming over – yeah and then one system all of our consciousness reaches that it's like we but we are we're continuing to go through that cycle at a micro scale and then there's also that cycle happening at a macro level it's the same relationship that we have to the Hindu perception of time we talked about the Hindu perception of time is categorized into four yugas this is also related to Mayan astrology and Mayan astrology having the calendar that says the world can end in 2012 they didn't actually mean the world is gonna end what they meant is that that era of time is coming to an end between 2012 and 2018 right it's the end of the Kali Yuga which is what I call the Golden Calf age it's like materialism degradation like false idol worship we just finished the Kali Yuga and we're entering into the South Sioux Yuga which is the Golden Age where the gods and goddesses reign and these periods of time are actually relative to Earth's relationship not only on its own like wobbly axes kind of thing the definition of a wobbly axis but not only Earth's definition to its own rotation but Earth's definition of its rotation closer to and further away from the center of conscious energy in the universe so we're moving back toward that center of conscious energy in the universe which is what gives our own humanity I really shouldn't ship to what I call like Second Sight or even like sacred geometry if you look at like the pyramids the the you know sacred sites and in Mexico and in Cusco and there when China and an Egypt like if you look at Giza and you take the face of an Egyptian statue and cut it in half and then you flip one side of the face and overlay it I mean it's literally and then you overlay that with the original image it's literally perfectly symmetrical we were able to do this because our consciousness was in a higher state and then all of a sudden it's like what happened is we started taking all this information that we experienced right like we started taking the experience of higher consciousness and instead of experiencing it what happened is people try to start owning it they started to grasp it right and they started to try and use this to control because we were no longer in the connection in it that high point energy with the universe we were moving away from it and when people start when we start to move away from the central to the center of conscious energy in the universe what happens is we start to essentially crush our own minds into into this kind of like it's like we're here and then we expand then we expand outward and then we're contracting and then we're expanding but we're going through that process over and over again in one broader spectrum that is a continual expansion of consciousness until the metter meta perspective of what is like our quantum relationship to consciousness reaches again the same point that our initial consciousness experiences every like series of four Yuga cycles that we go through I like how you describe the vicissitudes of consciousness because I don't think the ups and downs of consciousness are described at a meta some civilizational level most of the time they're described at a individual level so it's good to see and feel them really contracting and expanding contracting because I we do discuss quite a bit on the show the previous tribes of humanity that have been very conscious and so why are we here now with yes ubiquity in food and water in many cases but also the proliferation of the media culture yeah okay do you think we're in a computer simulation it's not a computer simulation the simulation is our relationship to your own consciousness it's funny to me because man okay so someone else is not altering playing with the code of our program listen it's funny to me because this is how like man contextualizes things right man looks at a thing and it's like especially in this age and we're taking what exists as an inherent property of our consciousness and we're essentially giving our power away and saying like the world is just runner created by a machine could me know this isn't an Asimov story like good I love as a mouse don't get me wrong all the spirituality could be programmed as well but it's it's the simulation is that where we're merging back into our relationship with higher conscious us so what's happening is we're experiencing our own quantum perception in real time because the age of shifting it's not a computer computers are from us you know what I mean computers are from us yeah it's like fire it's like programming of the quantum world and the string theory yes the programming of the quantum world is happening from consciousness computers are a reflection of consciousness that the idea that we are like are we in a simulation yes but the simulation is that what's happening is we have four bodies that exist at once okay we have our real time body that exists here we have the body that we experience in dreams which is our non-physical body which uses non-physical energy and then we have our quantum consciousness it is the version of ourselves that exists in a higher dimension that's able to watch over us through a lens of time that is not relative to material space we exist in a quantum state right we exist in in not only two places at once being here we exist in two places or maybe even more at once in the universe they say like be a witness like that's you tuning into what's actually happening upstairs so it's it's really about the idea of our relationship to consciousness it's our relationship to consciousness is a simulation we're just waking up to the fact that we we perceive time falsely we think that time is well not falsely it's just relative to the dimension of the age and the dimension of our relationship to the consciousness and the center of energy in the universe we think the time is like a line like Western time as a time line or Eastern time as a circle even the you guys are a circle but it's not a line or a circle something closer to it dot now we've been hearing razor blade on the show a little bit time is happening all at once all around us at once and we're able to access this percent this is why I teach people lucid dreaming we can access this perception of time in dreams yeah we did a little astral projection on our previous show just a lot very last one so okay Tony Lane question about what is the deepest emotion you've ever felt hmm I don't think there's a word for it was what was the feeling like because it's beyond the idea of the deepest emotion I've ever felt is an idea that there is an emotion that is beyond the sum of feeling because it's an out-of-body experience mm-hmm people quantify that with words like but they are overused words that I think people represent falsely like what is it like bliss or love or ecstasy or any of these other you know I think it's the most real emotion I've ever felt because it's the thing that makes you more aware of the idea that you're existing beyond your own physical body beautiful island so source is how I would describe it mm-hmm source is the deepest and most intense feeling I think I've ever felt source source yeah I like that a lot all right what do you think's the most beautiful thing in the world there is no most for me there is no most you know what I actually think is beautiful what other people perceive to be ugly but it's but it's true of heart that I think is the is the real definition of beauty easy is not what is just seen as beautiful real beauty is when you'll see something that is beautiful and that is hidden mmm the rest of the world looks on this this book called by Umberto Eco called on ugliness and it's maybe my loved art history and it's maybe my favorite art history book that's ever been written because it can textual eise's ugliness and art in the way that almost all other art historians work to contextualize beauty and that real beauty is like Cyrano de Bergerac it is the man who is ashamed of the way that he looks hiding in the bushes having another man read his poetry to the woman that he loves in an attempt to help her be happy yeah that's good stuff that is the beauty you know why that's real beauty because that is the beauty that more than any other form of beauty needs to be seen yeah appreciative yeah yeah I agreed that that brings actualization to people that brings transcendence to them it brings them meaning and value and fulfillment from their tribe I agree that's that's good that's very unique we haven't had that one for sure also the source answer was really good as well yeah Tony Ling Casserly wow what a great conversation yeah yeah you're fun yeah good yeah thank you for coming on the show thank you thank you sure thank you this has been such a pleasure I think that we have a lot to still unpack you'll have to do another session sometime soon yeah so much to unpack that was a lot of fun everyone if you had a good time watching definitely share this content please share it we need more people talking about these thought-provoking subjects join us subscribe hit that subscribe button join us in the community give us a comment below with your thoughts give us a like join us on patreon we need to sustain our studio need to sustain our electricity our food our internet all that stuff join us let us grow help us blossom we need people chopping up these videos and getting these clips join us there we'll have Tony Laine cassowaries link in the bio all good description there so we will see you soon thank you for tuning in you

Environmental, social, and governance (ESG) data: Can it enhance returns and reduce risks?



welcome today it's my pleasure to host dr. Andrea Sapna and Nicholas hooba dr. Haefner he is the deputy director of the Center for Responsible banking and finance at the Andrews University and he also the fellow of the United Nation back principle for responsible investment and new research has won several p i– academic awards nicholas wu ba he's the head of ESG investments in frankfort you also served at the head of green investments your certified sustainability investment manager you have served a number of senior portfolio management roles and other companies and Deutsche Bank Group my first question goes to you Andre s I read your white paper and I think it's very interesting to see these different aspects of ESG maybe you could summarize and tell us where do you think those great opportunities those ESG opportunities come from Henning thank you very much for the question I believe ESG let's first explain what that is it's environmental social and corporate governance factors and in a wider sense intangible factors which are not covered in standard accounting statements is a great opportunity for three reasons and these three reasons summarized are it's interesting for many many clients it is largely common sense and there is low competition for this particular information set so why is it interesting for clients big public pension funds have a legitimacy issue and they have an issue of relating to the public and relating to their societies and so they are really keen on EC and they're really keen on the un-backed principles for responsive estimate that's the reason why these principles grew from about three trillion essays on the management of the signature return or 35 trillion assets under management next the issue criteria themselves are largely in a business perspective common sense for a company it's very important to treat their employees reasonably to treat them excellent especially 90 for instance you can see what Google or SABR doing and in many other cases environmental responsibilities and corporate governance and responsibility for shareholders it's of course a very very important aspect then to all perform in markets is quite important to find information set which not that many competitors are using and their HD is beautiful because it's not yet integrated and standard Financial Economics curricula and not that prominent for instance in the CFA for that very reason we are finding quite a few inefficiencies and risk reduction opportunities with ESG data and that relates to the belief that grossman as Stiglitz are holding was a product of market inefficiency or market efficiency however you want to call it which is basically that markets are inefficient where a few people are searching the more people are searching they're more efficient the market gets and then it's kind of a cyclic process if it gets more efficient than people are moving away to another market and then it gets less efficient and it kind of cycles of yet I like your white paper and there you actually look at long periods of time why is it that that it seems that studies nowadays show better results and let's say ten years ago yeah that's that's a great question the first thing in the relates to today's topic certainly the ESG datasets have improved over time they get wider they get much more fine-grained in detail secondly the analytical technologies have improved initial studies were simply doing largely correlations there was little consideration of correlations and so forth now we can very neatly understand different performance drivers and of course nobody is saying that ESG factors are performance driver number one or two that for most equities is of course a national market in their industry but because we can very much separate all these performance drivers and we can explain ninety-five percent or more or the return variation we can find the opportunities in the issue data so basically in metaphorical terms we just have better microscopes for natural science researchers and where do these enhancement opportunities where do they come from I mean are there sources of it do you analyze those sources the enhancement opportunity itself comes really from the fact that there's low competition and commercially relevant information so there is little other analysts looking at it in the global scale of course there's probably hundreds by now but not thousands and the information itself is commercially relevant so for instance if you understand the risk management capacities of which might very well be approximated by their general ESG ratings especially in environment social case such as if somebody got BP right before the oil spill then that signals something about the quality of management and we've done a very simple test which kind of highlights that we've taken in this case iris you see there are five categories superb – really not that well rated and we have film portfolios annually updated with basically having all the firms with the same rating one portfolio the portfolio was the best rated firms has a lesser number of constituents because only few firms get that rating but when you look at downside risk so kind of the worst case outcome this portfolio is performing substantially better it has got 200 sometimes 500 basis points better downside risk the next best portfolio and so we are basically saying that in this case on the wrist side EHT data is kind of unveiling to some degree the risk management capacities of the firm on the ESG side and maybe more generally mm-hmm I also puzzled because your argument is basically saying that investors they're not aware so much of ESG and that's an opportunity in itself and then secondly you're talking about countries and industries can you explain where actually these opportunities come from we believe the opportunities come from the commercial relevance of many ESG criteria not generally but in context so certainly if industries were environment responsibility is highly important because there might be Texas coming up there might be pollution charges and so forth the industries industries yes then you have other industries where employee relations crucially important because the whole performance comes essentially from the employees and treating them well having a low turnover having higher motivation is very very important in again other industries and I would especially like to look at so-called credence services Trust is usually important there are industries such as health care where the client cannot assess the service under long after they consumed it they just have to trust the service provider and in these industries we have found that using environmental and social criteria is a fantastic opportunity for trust building I give in a real-world example those healthcare companies which announced the world most sustainable by the World Economic Forum they are outperforming by six and a half basis points estimated prior to the announcement in the year past the announcement over a several year time horizon they are performing by more than 8 percent per year abnormal return beyond the one you would hollow eyes get and so we believe that the ESG criteria have to be contextualized they have to be put in the right context in an industry level and then they can be very meaningful one further point I'd like to highlight is that of course at any point in time she cried you don't have the same relevance so you can see in markets climate change is a big topic in a year next year maybe not that big fracking is really coming up right now you can see shifts in their relevance and so we can measure statistically how important these topics are based on social media also some media considerations and that allows us to build more advanced strategies where effectively you can use cultural trends you can understand these cultural trends and lead to enhanced and and responsible investment opportunities Nick I hear it's basically common sense to do ESG would you agree if from a practitioner point of view that that is really common sense yeah I mean this is what we have we have framed basically ESG becoming really common sense or is already common sense I mean we think about population growth it's a these are really long term trends you think about organization trends these are also very long-term orientated trends and using ESG factors is absolutely crucial because on the other hand we have to think about how to incorporate these kind of trends into our investment processes and this is what we did basically over the last couple of years we have integrated ESG factors in our overall investment process we need to reflect this kind of movement and when you think about the questions people ask already these are already is G like questions talking about transparency of companies talking about governance issues and companies this is what we have done already in the past but people have not connected it so much to ESG and this is what we are doing right now we're really connecting it now to ESG and that's why it is so I mean it's an activist measure how can you implement ESG into your processes maybe you want to highlight that we are signatory of un PRI since 2008 and and F we have already said that we are using ESG factors that we have incorporated them that we are doing proxy voting Z cetera cetera et cetera UN PRI is our minimum standard basically and we are differentiating between is cheap broad and is cheek or since we have incorporated ESG factors in our overall investment process plus in our in-house research tool everyone has access in ESG core we are offering and we are going to offer more products in the future where we really have a more dedicated spin to ESG where for example we target an A to C rating and do engagement for a lot of the companies who have a rating between maybe D and E but we try to move them into a better rating into a better ESG rating so that's what what we are doing and that's what the client can can ask for well thank you very much both of you for giving a summary I would say we have touched a few points but there's more dialogue to come I think and you can read everything we've discussed in our white paper written by dr. Abner and please also feel free to contact us with any questions thank you

The current state of on-chain governance with Meltem Demirors (Chief Strategy Officer of CoinShares)



hey everyone so we're here today with meltem and we're gonna talk about Unchained governance and its tendency to trend towards oligopolies and what we can do to prevent that or what is the whole premise around on chain governance I think overall on chain governance is just such a messy topic and everyone seems to have different opinions about it and different viewpoints on whether it even works whether it's even worth trying and some people feel on the other end some people feel this is like the ultimate solution to governance I think there's really a spectrum of different views and we really want to dive into each of these and talk about the merit behind each of them and maybe even plug in some data if there's like we have information we can look at and that will help us form a more informed fact driven opinion so I'm excited about that so meltem why don't you give a kick so you wrote a post call like power politics power and protocols where you kind of dove in to the current state of on chain governance and one of the main claims you made in that blog post what was that the current mechanisms are trending towards oligopolies and before we even dive into that I think like it's important to kind of set the context and definition so that everyone's on the same page and so could you just give a quick overview of from your point of view what do you believe governance is and what does it mean to have on chain governance sure um so governance can mean a lot of different things what I outlined in the post is governance really is about the rules how rules get made and how people operate within a system and historically governance sort of been thought of as politics I talked quite a bit about you know the Romans and the Grecians figured out a long time for us and there's a great philosopher and political theorist named polybius who came up with this idea of the political cycle and how humans tend to organize in different structures and what the relationship is between Oleg appellees tyranny democracy o clock receipt Plutarch YZ etc so that was sort of the starting point most people think about governance politics and what's interesting about governance is there to sort of forms of governance there are explicit forms of governance in the US for example we have a government system we have a representative democracy and so there are a lot of different structures associated with that there are checks and balances between the three branches of the government that rule how this country works and so those are formal sort of specified governance mechanisms and then the other aspect of governance is informal and so informal governance is really about exercising soft forms of power control and influence so that's about the media that's about campaigning that's about backdoor deals or behind-the-scenes deals that may happen some of the power brokering and very mattering that goes on and so as we think about watching systems and blockchain networks the way I think about it is there's the protocol which is sort of the rules language how to system functions it's also the level at which the tokens are allocated and sort of managed then there's the network itself which is how this code is deployed into the whole state some time right and so with a lot of these new governance mechanisms there's actually layer above the network layer where there's a formal on chain governance mechanism and then Bitcoin for example has an off chain informal governance mechanism and cerium has an off chain somewhat more formalized governance mechanism because there is an ethereal foundation that is a formal body that is tasked with sort of providing support student helping develop the protocol and then there are new projects that now for the first time are live they've been talked about the last few years in the world of crypto but had not really been implemented at scale until we saw the emergence of Tesla's now we have cosmos launching which is staking protocol Mergent express things goodness and we don't have actual data points around the voting outcomes in some of these protocols and that's become really interesting for the first time we can observe how formal governance is trending how informal governance is trending and when they're on chain and off chain really have substantial differences the big thing I will say about on Shane that makes the stakes not Jamaica vet and that makes the stakes higher is a non chain governance when a decision is made it gets implemented into the protocol yeah that's for example if a decision gets made in Congress it gets implemented into the rules that govern the u.s. but if something is discussed like AOC discussing the new cream deal that is not formal governance right those are informal conversations so that's not implemented and so when we talk about people participating in formal on chain governance the implications are really big because these changes are actually getting merged into the protocol in real time and so kind of set in the context what do you think a lot of so entree and governance seems to be the approach that a lot of these early protocols have at least tried to take and what do you think is a narrative around the problem that they're really trying to tackle with on chained governance why'd you why do you think that was necessary and why do you think they didn't just go with off chain governance like Bitcoin sure um so one of the comments I made that I think is probably a bit I don't know maybe a little controversial is I think a lot of these protocols were formed with these new types of governance as sort of a direct response to the perceived tyranny of Bitcoin and so let me do you agree with that statement I guess to say yeah here's here a little bit more before I agree sure I think a lot of people so Bitcoin really you know for a long time was the cryptocurrency and Vitalik was inspired to create a cerium because of a lack of functionality in Bitcoin I think speaking with the Brightman's and reading some of the pieces that Arthur Brightman in particular has written around the inspiration for tells us part of it was a reaction to the fact that protocol upgrades in Bitcoin were so contentious and we've seen this play out over the last three years with the Bitcoin block size Wars which really started in 2015 they were my sort of first introduction I was starting to work professionally in the Bitcoin ecosystem and so I got dragged into that world very quickly this very informal very much off chain governance super messy very contentious there's a lot of there's a lot at stake here they coin at the time when this starting to happen was 300 million dollar Network it is now a seventy billion dollar network and so decisions like I made have a real impact as I think a lot of people just growing up in the world where it was only Bitcoin and there was pure coin and a few others we're starting to experiment with staking and governance mechanisms but really it was just Bitcoin and so a lot of people said well all this messiness around Bitcoin what if we don't just innovate with the consensus mechanism at the protocol level but what if we also innovate some of the governance mechanisms and try to look at new ways to organize people and to facilitate decision-making around these systems so in my view a lot of these sticking protocols or protocols with formal on chain governance or even informal option governance are experiments that are trying to untangle what types of systems may work best for the ultimate aim people are trying to achieve with these networks interesting okay so then you're saying that some of the Unchained mechanisms are trying to solve the problem with the governance that bitcoin had which was leaning more towards a tyranny perceived tyranny right yes hope you're on the Bitcoin core side or the Bitcoin cash side you know you see people forking the code and creating their own communities because they don't agree with the way the community their part is being governed and that's the beauty of these protocols if you don't have an amendment process or an upgrade process where you can achieve social consensus which is really what governance doubts about social consensus then people can just simply take the code because open-source software fork it and create their own community with its own set of values and its own governance yeah okay so then they tried to tackle this problem with on tune governance and I think in your blog post you listed five projects that currently have well-thought-out at least at least somewhat built that out like on Django and protocols not jargon so I did it I don't think people care about whether or not everything's slow designed to care about the money right right now this like mostly speculative investing though should be very candid most crypto today's highly experimental a lot of speculative investing so the five protocols I looked at ranked by market cap size where he owes nem tezo's D cred and – – that's right – sit around for a long time people always get angry was interesting is and all of these I looked at the form of consensus and how governance works in these all very different so – and then have a master node structure which is different than liquid staking or liquid proof is baked like with democracy concept and then es has its own very unique construct with voting for block producers and then block producers have this off chain informal governance where they convene and sort of make social consensus decision so it is very confusing it's a lot yeah and like I was looking at the blog post and it was obvious that each of them has a very unique way of designing and going about on chain governance and so to really even do an apples-to-apples comparison is kind of hard here but how did you go about looking at this data to try to like cut what made you look at this data and say oh no it's kind of trending towards an oligopoly sure so as I started thinking about it the way I kind of approach thinking about the problem set and then the solution design right so the problem set is governance of crypto networks is difficult the design was let's create new forms of governance ways of reaching social consensus or ways of agreeing on the types of changes we'd like to make as a community which is defined very differently all these protocols and then as a part of that design let's look at the outcomes of these different metrics that are associated with how these protocols were set up so the first thing I looked at was the risk and the reward of participating governance in each protocol and here the challenge is there are two fundamental functions that we kind of mentioned earlier so in a staking system staking plays two roles one staking secures the network right so there are nodes that people create and these nodes receive an inflationary award because they secure the network and then there's a second function which is participating in formal on chain governance and in some systems like deke red these are separate so deep red has I'm staking for protocol upgrades and then it has separate function called polity aware people vote on Treasury proposals tennis is very different and tells us both staking to secure the network and governance are interlinked and it's the same that you can't separate the two issues so the Athens amendment that was voted on last week the outcome of it included both a governance function and protocol upgrades and then in a OS it's totally different but the way I looked at is what's the amount of risk you have to take what's the amount of reward you get yes they dozen there then I looked at the number of people or a number of token holders participating in governance so the participation rate varies anywhere from you know 25 percent in iOS to above 80 percent in Dez's and I had some more data as well around how that compares to participation in rule or real world voting like the u.s. midterm election the brexit vote as well as recent data added another post was data around estonia's digital voting we found this digital voting the lowers the reader participation because people feel that the outcome is less significant if it isn't you know if there isn't friction of voting which is weird and there's like all these psychological issues with governance as well and then what I looked at was how many parties control these networks right so an EOS there these twenty one block producers there are hundred backup block producers but really decisions are made by those 21 and then also there's a fundamental relationship between exchanges who are large holders of tokens or investors who in a lot of cases may own 10 20 30 50 percent of a protocol as well as foundations or protocol teams who themselves may own a lot of tokens so then just using es as an example in the u.s. example block 1 which is the entity that created es holds ten percent of the tokens and they're voting with those tokens they're voting for block producers right the way for this the Taz's foundation still has a large number of the Taz's tokens that are intended to use the inflationary reward for the protocol but they're not participating in Unchained governance right so they have a clear separation of powers and so again just looking at a how do you actually participate in governance what's the cost what's the setup and what's the risk you're taking with the assets by having them on chain differs greatly amounts to all of them who can actually participate so do you need to have technical competence infrastructure set up etc how do you participate and then what does that mean in the context of participation rates we're seeing on these networks in these quote-unquote governance decisions so okay so you talked about Rick's like you're you look at the risk model how many people are actually involved in the participation and it looks like you made that claim based on the participation being coming from a very limited set of people is that right okay and is that only true for a OS or can you make the same claim for like – neo Tasos and decreed sure so to go back to that it goes back to this idea that actually biology sterna raphson talked about when they were building urn several years ago is the Gini coefficient right so the commute coefficient is an economic measure of inequality but the way I look at it is not the Gini coefficient for income which is house tracked in most economic studies but the Gini coefficient for asset distribution so it's interesting here is when a protocol first gets created especially with ERC 20 tokens all the tokens are mined upfront but even with something like Bitcoin where you know there was this fair mine which is also a potential topic but they're a group of people who inevitably will own a large proportion of the tokens and so looking at teza which I did an extensive analysis of last summer when they first launched the network which is an exciting time you know 80% of tokens were held by I think like 2% of token holders Wow so there is a really and I looked at the Gini coefficients of initial asset distribution across a number of protocols and many of them were you know point eight point nine which means very unequal so you have a small number of people who hold a lot of the tokens and then you have a large number of people who hold very small amounts of tokens and so when it comes to governance if voting is tied to the number of tokens you own this is kind of the definition of a Plutarch key right where the wealthy have more voting power and then that's further compounded by the fact that we now see the introduction of aggregators so exchanges wallets these entities that have large number of coins they're holding on behalf of their customers or funds and investors who may own you know ten twenty percent of the tokens in a protocol they have a really really outsized influence in the governance decisions that are getting made because they have a massive vested economic interest but also they own the tokens and if it's a one token one vote system that's how it's gonna work yeah so okay so if so and what you said what you're basically saying is that a lot of these protocols the initial distribution is so centralized that on chain governance by nature is gonna be centralized because only a few people own a majority of a tokens yes and then to further come on that once the process of staking for governance begins that effect gets further compounded because as inflationary rewards get issued to people who participate these larger players who are more incentivized to participate will retain their pro rata share of ownership of those tokens right so for example in Texas if I own 20% of all tubbses tokens today yeah so long as I continue to participate in the network I will own 20% in perpetuity even though the total number of tesla's tokens will increase by a factor of eight okay reinforce the plutocracy and I haven't seen nothing we're starting to talk about you know are there ways that we can dilute people over time and one of the ideas you know what they claimed that over time as people's perceived wealth in Bitcoin and even in ether went up we saw that the distribution of assets got wider because people start selling these assets for cash or for other assets they so then if you were to recommend new projects that are gonna experiment with Unchained governance mechanisms would you say that how the initial assets in tokens are distributed play a huge role and how successful the governance could be yes and no I think there's an ongoing debate so we have this conversation around decentralization often in crypto right and the question I always like to ask is but why yeah why right for example if I'm starting a small tech company and I have a really revolutionary idea I don't want that to be decentralized I want there to be very centralized entity that is endowed with a lot of money that have the resources and the ability to go and execute on the vision right and even before this call you and I were chatting like aetherium has kind of had this with metallic serving as a benevolent dictator of sorts and really being one of the leading voices if not I would argue he's the leading voice in the community he's trying to stake it take a step back and arguably it's created some strife and discord within the theorem community because there's now kind of a void of leadership and so this is where you know this argument is is it better initially these projects are experiments the jury's still out as to whether or not unchain formal governance is actually an effective mechanism and the metrics you use depending on what your goals are can be very different so in an investor's eyes that could be success in a users eyes it could not be success I mean the problem is it's so subjective to gauge whether or not things work or whether or not things are successful but I would argue that you know if you have an idea that you're working on and it would benefit from more centralization then maybe not having a lot of participants involved initially is a good thing but I do think you need to be cognizant again of the design space you're working in and what the end objectives are and if one of the end objectives is to have quote-unquote fairness which is very esoteric concept or to have wide distribution that's one of the things you need to think about very early on in terms of how you initially distribute assets and the incentives over time that will dilute the ownership of really large holders yeah and you make a really good point here and this is something that I'm we're I mean for example with true story we chose to go with the more centralized approach in the sense that I you know like we have a leader we have a team yes I'm the dictator I don't see I think I think this is was this was 100% the right choice because it helps us actually define a vision execute on the vision and ship something rather than trying to build something that like in the end like unless you're a blockchain I don't really see your complete reason yet why an app should be completely decentralized and so I don't either and I don't think like decentralization means nothing in and of itself it's internet right exactly what is the goal you're trying to achieve with decentralization and I think people go to with trying to make things decentralized for the sake of decentralization and I and I and I think some of it also falls on the community too because there's this there's almost a shame shaming done like if you're too centralized and so some of these protocol developers feel a pressure to need to decentralize who don't really understand understanding why right absolutely and I think that goes back to what are you trying to do here and one of the interesting questions to me just looking at so there was recently some great research published around participation rates in the recent Aragon Aragon is actually second layer protocol that can be used by other protocols that don't have a governance mechanism to do governance and where that comes from if you'll recall back in the days of the Dow the original etherium Dow when the Dow got hacked there was a conversation around you know having a hard fork in etherium and coin vote was conducted and there's a great blog post written by Peter Todd that I referenced in my log post about why coin boats necessary and since coin vote was conducted nobody knew how to participate in it I think 5% of all a third token holders participated and those that 5% participation rate represented like 200 wallets a very small number of wallets right and so I think a lot of people looked at that and they were like wait a minute we need a better way of pulling the community for sentiment and this actually goes back to again I draw a lot of inspiration from history because I think cycles sort of rhyme and dime time and we have this new technology medium that we're trying to use to resolve a problem that's millennia old right it's basically as old as humans are and social structures are it's a really old problem and we have this new tool and so trying to figure out can this tool help us design around this problem in a new way and I think's really lacking is the dialogue right so back in the days the Romans whenever there was a big decision that was being made or contentious issue there people would go to the forum and there were people who are professional or tours or speakers and they would debate right that's why I love these debates you doing people would have conversations I was on the high school debate team loved it loser I think you know I actually used to hate debate my when I was in high school because I thought debate was intimidating but I've actually grown to absolutely love debate because debate is an incredible way to learn and truly learn a topic because like when you're arguing aside you have to think about all sides of the claim and what you're really trying to put out there but anyways that I digress go ahead no it's very true but this was the way and this is one of polybius observations as he was writing his treatise on social organization and politics in the structure of human society one of his observations is people are not going to know what good governance is unless they're educated about it and the only way for people to be educated is to participate in and observe these debates right where people whose professional job function it is to gather data and to research and to understand these issues and become experts in these matters where they debate that's what the people who represent us in America are supposed to do now whether or not they do that effectively I've many many doubts but that's a separate topic so the idea is since each protocols so different since each network so different since he's community around these protocols so different what we need is forums where people can look at the data where people can understand both sides or the many sides a particular issue and make informed decisions about governance now in reality like I personally participate in probably six different protocols that deploy sticking of some sort I already spend a lot of time on purpose doesn't look impossible to keep up with and I have a job and I have side projects and so keeping up with all the nuances and intricacies of what's going on all these sticking protocols is a lot of work and most people just don't have the appetite to do that and so to me designing and voting mechanism or governance mechanism without thinking about how information data and data dissemination is going to happen is kind of it's an incomplete experiment right because people are making decisions in a in a vacuum yeah yeah exactly so it loses all context and so to me one of the core things to think about is okay if we are gonna have on gene governance and experiment how do we actually better a t-test the quality of the conversation happening in these different networks and the level of engagement in those conversations like if you aren't on Twitter crypto Twitter I not gonna know even that a vote is happening or that you're supposed to do something with your tokens and it gets into the the whole I know exactly what thread you're talking about with the argon and they were saying how the participation rates were like pretty pretty negligible like in the one digit percentages or something and I think there's a lot of reasons that go into that one is like the UX for it is really complicated today like you kind of have to be pretty technical to even be able to go in and vote in any of these protocols to an interesting point that someone made in that thread was that like like what is an incentive what is the incentive for someone to come in and vote like people don't want to govern for the sake of governing right laughs like like most humans just want to live and other people make decisions for them and that's why we have a representative democracy like people don't want to always be voting I think the question even goes deeper than like UX it's like it's like what is the incentive for these two people to even participate well I think what you're expressing is the question I come back to you with all things in crypto which is but why exactly we can create this great coding tool and we can create these tokens and these two tokens systems or one's voting token and did you just share your tokens Aragon is doing a why right and I think at the end of the day um one of the things I even struggle with is so you're working on true story right you know everything that's going on in the company to you this is like the most important most significant thing to the outsider I know very little about true story I don't ever think about true story unless I'm reading something you've written or reading or engaging with you and so I didn't people forget context to your point look at the engagement rate look at civic engagement in this country look at civic engagement around the world and again I go back to the example of Estonia Estonia introduced digital voting like people just don't care I have a mortgage I have kids I'm in school I'm working a job I'm trying to figure out how to live I have a lot of stuff going on you know voting on issues that to me feel arbitrary like for example you know what the gas limit should be I don't care and so I think a lot of times we kind of lose that larger macro context which is where one of the things I'm the whole inspiration for this this blog post I wrote was a talk I gave at Eragon Khan about crypto cartels and I actually don't think that having centralization in governments is a bad thing exactly I wanted a page who are experts right I am perfectly happy to let someone who is an expert in I don't know D cred make decisions on my behalf because I don't know and if that person holds a large number of tokens they're going to be financially motivated to do what's in the best interest of all token holders right yeah and like this kind of goes into there's a really good blog post a c-bro where he talks about like like your end users don't really know what they want like it's you your job as the expert to kind of help design these protocols so why are you delegating that those decisions out to the end users who have the least context like you just said and that goes back to you right um that goes back to this idea of path dependency and Schelling points right is what really in my view governance does is it's a problem that people have tried to solve for a long time and this is the problem of Optimum's right and so there's a lot of research that's been done around political science and governance systems in the real world not in crypto world and one of the findings actually was that the system that leads to sort of Pareto optimality for the populace as a whole not for individuals is actually benevolent dictatorship which is really a great thing can you go into that sure um so what's interesting here is so each individual has their own preferences right so you have your own optimal governance structure I have my own optimal governance structure because we're all unique individuals preferences experiences insights expertise etcetera in different areas however if you take 300 million people who are part of the United States of America or if you take say for example you know in the test protocol I know that one batch cell reference that one the initial I see oh sorry the token fundraiser 32,000 people participated so you can consider the size of that population to be 32,000 although arguably is probably grown over time there really isn't a great way to track all the individual chocolate holders but the number of quality address is probably good indicator right so say you have a population of a million users in your crypto network right a million holders of your token because in this case user is equal to token holder which is also kind of an imperfect relationship but it is what it is so we have a million users in our digital state if you will right let's call a digital state or a network each of those has individual preferences but collectively the type of governance structure that makes them happiest or as best for them is often not a pure democracy it's often either representative democracy or benevolent dictatorship oh my god that's so fascinating I knew I didn't really I didn't know about the benevolent dictatorship being a optimal governance I'll have to read more about that I'll find the academic paper where it was said and I only learned this debate with someone at crypto Springs which well yeah this woman angel who comes from the world of government and NGOs she and I were having conversation we're talking about governance and she's like well actually this is what I do for a living that was her expertise certainly not my expertise and no she's just giving me a lot of great data points around a lot of the research that's been done and again I think you have to go back to you know a lot of things we're doing in crypto are attempting to resolve problems that have been persisted throughout human history and learn attempting to resolve them in new ways so in order to understand how to design an effective experiment we have to go back to what's been done in the past and when the outcomes of those experiments have have been otherwise I sometimes worry that we're simply innovating for the sake of innovation yeah and I sometimes see that right it's we're seeing that now as some of these governance protocols like okay great we have this thing but what what do we do now why yeah I think a lot of a lot of projects today are doing like they do stuff but they don't really think about why and what is it what is really the problem that you're trying to solve and I think even then even for example not just in governance but like defy well I think like we're reinventing hot/cold up so fine now is what I heard what is it don't fire they don't think don't fire okay Wow okay I'm Way behind times and I think like we're reinventing a lot of stuff that's already been done but not really thinking about why or what problem we really trying to tackle here and I think I don't know I don't know if that's just the nature of the fact that we're so early and it's so developer oriented and so developers love to tinker and so they're just tinkering with this new technology like I don't know what it is but like people aren't really thinking about problems in a big way and I don't I don't I don't know why well I think it's exactly what you articulated I think one component of it is there is this premise that block chains will eat the world right so Marc Andreessen you're saying the world and so there's now this new beekeeper saying blockchains will eat the world and I actually think there's a very real probability that black sheets well yes the world not in their iteration today one and I think two is I am also not convinced that some of the designs we've seen today are ultimately the designs that are going to be optimal for the largest number of people right so if we think about this from an adoption perspective yes there's still a lot of work to be done to build out the application layer and in fact I just published something on medium I hosted a thinking summit um early last week where we brought together some of the different players in the staking space whether it's large investors exchanges taking as a service companies data companies prediction market companies and a lot of the conversation was sort of around how this ecosystems of evolving and one of the things we talked about it's like oh we need applications that'll abstract out the complexity of how you're participating governance and all these different protocols and that'll go a long way in resolving some of the challenges and I'm like okay great so you can create an abstraction layer and it can literally be like going to a poll and picking on issues but it doesn't solve the fundamental question of okay we can have tools we have applications you can have these networks but what are people going to use them for and that's kind of the phase we're at you know you could call it the crossing the chasm phase at the traffic disillusionment depending on what management consulting theory but at the end of the day I feel like we're sort of at this existential crossroads we're asking but why and like there are a lot of problems people are solving that yes they're intellectually interesting but in a way it feels like intellectual masturbation yeah I'm worried that we're sitting in an echo chamber and we're forgetting like we are small group of people and we're thinking about problems that impact seven billion people who live on this planet today nine billion people who live on this planet thirty years from now there are really really big problems that need to be solved that I don't really think blockchains are the only part of the solution it requires working across different domains it requires an core creating ethics behavioral economics and you know a variety of different fields you know we've seen a lot of publications recently on the inherent discrimination in AI and even in product design so I think they're just like much greater societal problems that we should be thinking about so that's been one of the personal struggles I guess I have it's a long and rambly sort of way to say I sometimes struggle with this lack of well why why yeah yeah and it's it's a really good question and I think like it's it's not well accepted like if you try to question question some of these some some of the crypto like really deep crypto folks like almost get offended and I think it's not meant to offend but it's meant to just like I think we're at a phase where we have this technology and we're trying to find a use case and everyone on the outside is looking in and be like so so what is this useful exactly like my boyfriend for example he's not in crypto but when I talked to him about the crypto world he's like that sounds like a cult and I'm like ah it kind of is you know like so funny as my husband works at an actual cult he works at barstool sports with a cult for all their followers are insane their media company so we have these shirts he has one that says barstool versus the world and I have one that says Bitcoin versus the world so our on Culp's that we follow but I do think well I think people get offended because people are spending a lot of time and energy they're super passionate about what they're doing and I think people have come up with really innovative and interesting things and I think sometimes when you ask people questions they construe it as ad hominem attacks I've certainly had this problem I tend to be an extremely direct person I was raised in the Netherlands they're very direct calls I tend to be very direct I have never felt an emotion that I have not verbalize Doris fries that's part of my culture like I'm sure you should Dutch that's what we do we just talk about our feelings we say what we want to say and I think for someone who's really deep in this to your point I think about this 24/7 it can feel like an attack but I worry sometimes that without critical thinking and without healthy discourse and debate we're living inside of an echo chamber and what we've seen during this bear market is instead of going out into the world and you know addressing some of these fundamental existential questions about crypto and blockchain networks instead our communities becoming more insular and withdrawing more into these echo chambers because we want to reject all information that does not conform to our worldview I'm not school damaging it's it's actually yeah it's really bad and I I'm honestly super passionate about this problem because like I've noticed that like people make claims on the Internet and every time I kind of I will I will DM them privately and be like hey like would you be open to talking about this and then they they don't feel comfortable talking about it because either a they realized that like their claim is unsubstantiated but the bigger problem is actually scared they're scared to put out controversial views out there and I and I'm having a hard time getting this industry era this mindset of being right and wrong or plugging plugging into a narrative and if it doesn't fit into a narrative then you don't want to talk about it I just think like yeah hundred percent of the same page we lost the ability to have a healthy conversation and even talk about the most controversial views like for example I notice in the beginning of this conversation you were a little bit nervous even say that bitcoin is perceived as a tyranny and I don't think you should feel that way I think you should be totally comfortable saying that well I am you know I've had an interesting um five years in the Bitcoin community and just going through the scaling sort of situation having been you know part of the goings-on of the New York agreement which was just very messy in so many different ways and not relevant to this conversation but I think I have become very sensitive to all these different factions but I think part of it's also if you think about what we're doing here one of the interests things is you know we're seeing kind of the fall of interest in religion and the rise of interest in science and truth and reason racing going through this the shift but in that process what we're seeing is the increasing sort of fragmentation into self selected communities that perpetuate and substantiate our worldview and what that's leading to is I think just a interesting lack ability to have discourse and this has been debated widely with you know the use of Twitter Facebook and other social media platforms but one of the reasons why I think Krypto feels so contentious is because this is in a way its own religion it's a common as you said and so when you start to question some of the core beliefs of some of these communities to a lot of people you know it feels like an attack and that's where to me the government's piece gets really interesting because staking is going to be a billion-dollar industry by the end of this year there will be a billion dollars of network rewards that are paid out this year we're dollars in network rewards and the data for that by the way is this post I just published which is a summary of the staking summit we hosted I mean there's also a little ecosystem map that maps out some of the key players that are emerging and then all the different ecosystem participants and how they participate in these governance and state systems but there's a lot at stake here and to your point there is a reason that people want to control the narrative and the reason why is there is money to be made here so controlling the narratives about controlling the flow of money it's about controlling attention which is arguably the scarce resource because money feels infinite and crypto and really what scares is talent execution capability and attention and so all these protocols are vying for attention right yeah I think this is my like if I'm on one mission with true story and just like in general in the crypto world it's to like open up people and have conversations because like and that's why I've kind of been a little bit more open on Twitter lately as well like I think I think people are so scared to be wrong or fall into the wrong narrative and and you're right like it's there it's for the first time there's there's so much money tied to this system that like the bag holders are like any time you say something it's like it's it feels like a personal attack against you oh yeah and every time I say something there's like first was the ripple army but now all these other coins I've never heard of have their own like armies who will everything I write they're like have you heard of jedidah like for a while is a token pay which I don't know what that is and look at the end of the day here's here's what it comes down to we have created a medium for permissionless financial innovation and so having created that medium and i think it is silly that people are trying to play like the ethical or moral police for the industry if someone wants to create thick connect and if someone wants to buy it and there is a market for big connect that is free market economics at work now I personally do not prescribe that I personally take issue with some of the ways things are being done and I have repeatedly expressed my view on these things I think I have tried to be seeding lis um open and transparent about my own process of learning because we're all figuring this out there is like no right answer nobody's an expert on everything we're all figuring this out as we go and we may design something with one intention look at the doubt right we designed it with one intention but what ended up happening was totally unexpected it was very bad for the theory community it led to sort of this turning point but we're designing these things are deploying them alive and sort of putting them out there and seeing what happens and I think the the biggest question I always ask is okay what is the hypothesis we're trying to prove right so as a mathematician and someone who always likes science you start with hypothesis right and then you figure out how do I design an experiment that's going to confirm or reject that hypothesis and what are the data points I'll gather and so that's why I think the challenge comes in for people is it's easy for me to you know get on stage crypto event or hang out with people and make all these claims and say all these things but then if I look at the hype if I asked you what's the hypothesis you trying to prove and what is the data you have that substantiates refutes this hypothesis and if it's refuted how do you design a better experiment or change the design parameters to attempt to confirm that hypothesis then they kind of look at me like I'm a crazy person oh well like you don't get it like decentralized oh my god that it may be really no but I think that for this like for crypto to read for people to trust what's happening here for people to believe in these things yeah it has to be evidence like Copernicus was trying to prove that the planets revolved around the Sun but the earth revolved around the Sun that was like the most heretical idea ever many people were killed and hanged and like burned at the stake for trying to articulate a fact yeah but for the first time who's able to use data and positively demonstrate that this was in fact what was happening and so again I kind of feel that the same way sometimes like we need more heretics who are willing to say these unpleasant truths yeah and in fact and it's not to say that these sermons are worthless it's just less design better experiments and be more transparent about what we're learning um because I don't think we do a good job at that and governing this is the place where it's the hardest because no one's publishing jeanna about anything yeah I agree so like if you had to give so basically one thing for I would I would recommend people take away from this is like everything in crypto is an experiment if anyone tells you otherwise I think they're lying to you secondly meltem like if you had to give someone advice in terms of how they should go about either designing on chain governance or any kind of protocol like what would you tell them I think the biggest thing I would ask is but why why why do we need this um look at all of the things that exist today both in the crypto world and by the way outside the crypto world like Oh things can just be done with databases and just because you're using applied cryptography doesn't mean you're watching so but why why is this needed why is this necessary what is missing in the world today that this will solve for one and then two as you think about sort of how you're articulating the value proposition or sort of how we might be able to track whether or not your view of the world is one that makes sense is what hypothesis or what hypotheses are you going to test and in what order and how do you effectively prioritize right so I think that people sometimes forget that one design is iterative but it's also there's path dependence that's created when you make one decision early on that sort of sets the stage for everything that happened subsequently and so I think for a lot of people I just have a lot of questions around sequencing when they're gonna run what experiments how they're thinking about deploying things because there is this idea in crypto and data everything is changeable and I don't think that's true because you get luck in effect and again as we've seen through a lot of these governments challenges once people get accustomed to a certain way I'm gonna get entrenched interest it's inevitable it's human nature is how we operate and then the last thing I kind of always like to say is block chains don't change human nature so never forget that humans are greedy self-interested vain envious lazy myself included and that's not a negative comment it's not to say people are inherently bad I just think again people have very different priorities and typically people's priorities are fairly focused on their peripheral world where they are the center they are the Sun right I'm the center of my own solar system and inside of everyone's brain there is a view of the world that is very different from yours where they are at the center and I think sometimes people forget that when there's someone so like why should I care about what you're doing right I think like in the end of the day we are so obsessed with this technology but the technology needs to operate with humans if you don't understand humans then you're left with just technology and so I think I hundred-person agree that like especially if you're designing governance protocols like you really have to understand humans human behavior how historical government governance structures have existed what's been tried what's been failed because there's so many lessons to be learned from history that I'd be ashamed to just try to invent something when you're gonna save probably years of time or even decades of time just learning from history but we're reaching almost an hour so I'm gonna cut the session off now but thank you for joining and for anyone who has comments and questions there was a bunch of really good questions in the in the periscope will follow up with answers in the in the Twitter thread so just ask those questions there yeah and thanks for the I love these debates so keep them going and then if anyone's interested in government's working on projects around governance or staking I did publish something on medium today about the sticking summit but one of the things we're doing is kind of creating an ecosystem map of all the different protocols and players in this developing growing space so if you're working on something here please add your name contact info we'll have a mailing list of sorts soon so we'll let you up tin to that and then we are trying to create kind of a repository and easily accessible place so people can connect talk to one another share more but also so investors can learn about your company find you and journalists we're looking to talk to people can get a broader view so I highly encourage people to communicate collaborate and my DMS are always open so happy Thanks Melton bye guys you

Pariah parties, Policy Profiles and Part Politics (German Elections) | Marc Bebus



and thank you very much for inviting me to this highly interesting conference so as someone said the government formation process in Germany is still ongoing or almost finished now but it took us six months to come to a government which is at least four term terms a longer time period a relatively long time period just want to show you slightly the background which factors somehow influence the quite complicated term government formation process speaking of the the big elephant in the room the IFD was that during the whole year of 2017 so the question was how strong will the FDP how many seats they will occupy in the cover in the 19th German parliament the higher the boat share the seat row of the aft the more complex the government formation process will be and it turned out to be that at almost 13 percent of the votes this was really a complex government formation process simply because there was no majority for any of the traditional ideological camps like coalition's between christian democrats and liberals or between social democrats and the queens the other of quite important aspect was the martin schulz hype during the years of 2017 so Martin Schultz was nominated as a party chair of the Social Democrats and as the Chancellor candidate with 100% of the vote and there was several Democrats were in the polls partly this recent view polls and early spring 2017 the strongest party this lasted for a few weeks what happened then was a state election in a small state close to the French border the Saarland the Social Democrats had really high hopes to become their two strongest party to replace the incumbent christian democratic government this wasn't to be they really lost this election quite decisively and they somehow set the stage for the whole election campaign on the federal level but also led to create severe election defeats of the Social Democrats into other states and filius recall shown and then the former Social Democratic stronghold of north and west failure so one could argue that at that time the SPD campaign was already more or less finished what we had after the election was coalition talks between the Christian Democrats the Queens and the Liberals which but the three parties of the four parties if you count the CDU and CSU as a separate party we're not successful at the end this was also an election that we really had in Germany a formatter from Palestine might have played a quite important role in convincing the Social Democrats to join the government formation talks for the Christian Democrats would then have an agreement between Christian Democrats and Social Democrats here's Martin Schultz still on the on the slide now replaced that until malice and rush also kind of a complicated and very complex situation I will not focus on all these aspects and following I will mainly focus on policy issues policy positions and party specific issue area salience is when explaining the government formation process and the outcomes of the negotiation process in terms of coalition agreements okay just visually this is the 19th John Boehner stark with the number of potential coalition's with 63 this is in a comparative perspective for the Dutch and and Belgium colleagues a rather small number for German terms it's a really high number this is the highest number of potential outcomes of the government formation process since the 1950s so it was really from already speaking from this number it was really a complicated process so the research questions very basically which factors determined coalition formation in Germany not in general but also in 2007 in 2018 and why did the coalition formation negotiations between Christian Democrats liberals and Queens failed in November 2017 and why was finally at the negotiations between the SPD and the Christian Democrats successful in February and March 2018 very briefly theory on government formation I won't be very detailed here we all know that this is an interplay of several factors parties are office seeking try to win control over as several cabinet posts as possible because simply then it's easier to implement there are policy positions and which should then please there the supporters of the respective parties and should then make the reelection or increase the re-election chances and so we find robust evidence for these theories and comparative studies this is also then we also find this for the German case on the state level on the national level even on the local level that this office and policy seeking factors matter for the outcome of the government formation process there's a bunch of further contextual and institutional variables that matter there is an agenda setting advantage of the strongest party the role of the Fermata is important it was at least important in this election there is also an incumbency advantage for the incumbent government bargaining costs are lower this might not apply to the incumbent Christian Democratic social democratic government because both parties not really favored to form another government for electoral commitments play an important role particularly multi-level structure in Germany matters the second chamber in which the representatives of the state governments sit have a say an almost 40 percent of the legislation we also find evidence that coalition preferences of voters and party supporters matter and also the trust between individual politicians that are involved in the negotiation process method two last aspects are hard to measure quantitatively but when doing some qualitative interviews with former ministers we will find also evidence than particular trust between individual politicians has a decisive impact as I said I will focus on the policy positions and the issue areas alien sea of parties in Germany in the following and I built the analysis on a data set on Party competition and government formation and Germany on both the federal and the regional the state level since 1990 I was still working with Hamas warning on that since since a couple of years so what we did in this project was to estimate the policy positions of parties on the basis of their election manifestos on key policy dimensions we focus here in the following on the economic policy dimension and because of the high salience of immigration policy on immigration policy and the government formation process in 2017-2018 this data set covers not only the policy positions of these parties but also the characteristics of all potential and ultimately formed governments whether the coalition is minimal willing includes the strongest party and so on so this reflects all these important theories that I mentioned a few minutes ago we estimate the policy positions of parties on the basis of quantitative text analysis we here apply to the verticals technique which provided robust quite robust and valid results for the German case when comparing the estimated results with data from the comparative manifesto project for instance we try to cover a rather broad time frame so we chose the labor and expert survey allocate their scores to the 1990 election manifestos of the federal parties the 2002 P node and labor expert survey to and allocate there at these course to the 2002 manifestos and what we did in the last year also because of the AFD and the complex situation to estimate their positions we performed an expert service for the German case our task German political scientists to well to replicate the pinaud and labor expert survey so that we get some reference course for the 2017 IO parties when estimating the eve of the determines of government formation we apply conditional logit model this has somehow become the standard in the analysis of coalition formation other colleagues like Glasgow colder and colder apply mixed logit models but the results more let's remain stable and are not really different than comparing to the results from the conditional o chat more just briefly the policy positions that we estimated with word scores on this figure shows you the positions on the immigration and economic left/right dimension each dot here is a position of an election manifesto not only on the federal level but also on the state level on the regional level so what we see here is that the parties are Mallis located where we would expect them to be Christian Democrats adopted rather centrist positions on the economic left-right that I mentioned and a bit more well with the barians overtime moderate or restrictive positions on immigration policy but what we see here also in terms of the AFD position they're really somehow our play adopt positions that were not captured by any other party on the immigration policy dimension so there's this is in lines the AFD somehow adopted the position which was not covered before and this might be a reason why they are attractive for a couple of voters but we also find this in relate in relation but Buttkicker under presented the FDP also shifted its position on immigration policy over time became much more restrictive on immigration policy compared to previous years briefly determinants of government formation germany these are the results of the conditional logit model so what we find here is evidence for most of the theories rejected coalitions are less likely to form a potential coalition was the pre electoral alliance this coalition was more likely to form important for us here is the negative significant and negative impact of the ideological heterogeneity within a coalition so this variable captures captures not only the distance between the parties on both dimensions but also incorporates the salience e of the respective dimension from the perspective of the respective party so that for a social democrats welfare issues are more important and immigration issues or that for the AFT immigration issues are more important than economic policy issues so this is a robust effect coalitions are in germany more less likely the more heterogeneous a Coalition is even if we control for this battery of variables that are listed here what we can do on that basis is to estimate somehow predicted probabilities which coalition is likely to form and on election evening at six o'clock before Martin Schultz said quite white audience that the SPD will go into opposition the most likely outcome was according to this model a continuation of the incumbent coalition government between the Christian Democrats and the Social Democrats had the chance of 72% Jamaica coalition option between Christian Democrats liberals and greens was only at 23% this changed of course after the SPD rejected a grand coalition on election night and after the failed coalition negotiations between the FDP greens and the Christian Democrats the incumbent coalition government between the Christian Democrats and the Social Democrats was by far the most likely outcome of the government formation process minority coalition's were quite widely discussed that at least according to this model which only very low chances I had very low chances to form why was the why did the coalition formation talks failed between the Christian Democrats the age the FTP and the Queen's so what you see here is all the positions of the 2017 parties and their manifestos and what we also did and the analysis is to estimate the position of the negotiated policy documents so that the fascinating thing of the of the government formation process in Germany was that even the the Jamaica coalition partners drafted a coalition or at least a document which includes the compromises they agreed on and we blocked this document into the analysis as we did with an agree with the coalition agreement and coalition negotiation paper of Christian Democrats and Social Democrats so the negotiation paper between Christian Democrats liberals and greens was inside of the Perito set here in this triangle but it was quite far away from the FDP position on the economic left-right dimension and this figure does not take into account that we'll show this to you on the next slide that the economic left-right dimension first the most salient and important one for the FTP for the Liberal Party so this distance between a negotiated policy compromise and the FDP position increases when taking into account that the economic left/right dimension is by far the most important dimension for the liberal party if the FTP would not have let left the coalition negotiation talks my guess would be that the Green Party would be it would be at least conflictual for the Green Party and the convention party convention to agree on this negotiation because the negotiated agreement the distance between the agreement and the Green Party position was rather large and the immigration policy is the most salient dimension for the Green Party and just briefly the negotiated coalition agreement between Christian Democrats and the Social Democrats almost perfectly on the Pareto surface between the two parties and it shows at least in terms of policies that the Social Democrats were somehow able to enforce their policy positions quite well during a negotiations very briefly the descriptive overview on the relative salience he of key policy dimensions so as I said for the FDP economic policy compared to immigration policy is much more important and that's the reverse figure for for the Greens the immigration policy is more important than economic policy and taking this taking this into account it really matters for the outcome of the government formation process this is the weighted ideological heterogeneity within each potential coalition and it shows you again well the most ideological a compact coalition would be one between agree Democrats and the Liberals with the score of 1.3 but the second closest coalition was the one between Christian Democrats and Social Democrats with a score of almost 2.8 and the distance the heterogeneity within Christian Democrats within the coalition between Christian Democrats liberals and greens was worth five point three higher than the one between Christian Democrats liberals and the AFD conclusions at least is some standard coalition formation tea really helped to explain government formation in Germany even in the complex setting of 2017 policy positions in combination with the dimensions aliens is played an important role together with all the other factors that I discussed briefly what we could also vote for this also somehow observable and that is also set by some former ministers that we interviewed in the last week's is that Social Democrats really could use their internal conflicts to get in a very good position during the negotiations with the Christian Democrats what does all this mean in terms of survival chances of the third American cabinet polls are one out of an important indicator there will be state elections in HESA and in Bavaria and fall of 2018 if the Social Democrats and the Christian Democrats won't do well not sure what this means for particular for the Social Democrats in the coalition on the federal level another interesting question is the programmatic development of the AFT not in the next one or two or three years but maybe in the next five or ten years if they become a stable component in the German party system the question is whether there is a chance for cooperation between a more moderate aftd Christian Democrats and the Free Democrats when looking into Austria there is a coalition between the FPO and the Social Democrats in the borderland or between the People's Party and the freedom party on the national level and then Kevin and yam there are also currently somehow discussions at least this might be it's not the blueprint but at least something that might happen in the next 10 years if DFT remains stable looking at some opinion polls in eastern Germany this will be an interesting process DFT is the strongest party and it will be really complicated to form a coalition excluding the AFT and Sexton it seems that the Christian Democrats have to form a coalition but the former communist party to win the parliamentary majority so this is will be an interesting development at least for next years thank you very much

Power Struggles in Corporate Governance



okay so let's talk about kind of this classically what we talked about the problem with or regards it's this tension between the board of directors of course managers and owners or shareholders and I kind of like to put them in a little cloud on the outside of all that the government and the middle of you should put employees I'll give some more definitions that are a little bit more depth of what a Board of Directors is the managers all this kind of stuff because that's the subjects in this module but there's kind of a brief overview of the things that are going on here so typically between these five parties there is seem to be a divergence of interest right and the question of corporate governance a big question of corporate governance is whose interests should come first so you've got the owners and shareholders corporate governance is of course less of a problem historically when you start talking about you know the 1700s and before where a lot of enterprises were owned by manager owners right it would Bob general store Bob's with the owner maybe had his kids working for him and that was about the extent of corporate governance in action a lot of the law or said very little say and what bob was doing in his shop in medieval Europe today when I talked about this during business history we have this issue of managers as trustees so owners of firms delegate a lot of the oversight and the day-to-day running of a firm to the managers and so they have to trust that the managers are taking actions that isn't that are in the best interest of the owners but of course managers have their own interests right they announce you may not be the owners of the firm but they want to make sure that they can maximize their compensation and their well-being and that goal may or may not be in line with that of the owners and the shareholders now as firms have gotten larger the diversity of ownership has expanded I mean think about some of you may actually own stocks I know for example that I manage my retirement actively and I and I I buy and sell stocks now I own you know a variety of stocks in a variety of companies but I don't take an active interest in it in fact I very rarely call in to the quarterly earnings reports all that kind of stuff quite frankly why because I'm a professor full time and I'm doing these videos when I have a little bit of free time on top of it so I just don't have the time to be managing what's going on in the firm now because there are in some firms you know literally hundreds of thousands of different shareholders loading different proportions of the company some you know ten thousandth of a percent ownership and then of course in your larger companies every once in a while you have a shareholder grows about five percent of the company I can't simply just delegate manager responsibility to management because I own so little of the company a thousand two thousand dollars of a multi-million dollar company that I can't really delegate that authority managers effectively so the group of people who represent me are the Board of Directors so the Board of Directors their goal is to collate kind of all the diverse interests of the owners and shareholders and communicate that interest to managers in other words they are the one that represent the owners they're the face of the faces of the owners with respect to the managers a further duty of the board of directors is to compose a company strategy and then if the managers particularly the CEO the chief executive officer who execute on that strategy of course as we get a little bit more into this video are these videos in this module we'll talk about kind of the debates between should a CEO also be a chairman of the board of directors or so there'd be two separate positions that's kind of a debate there's no real answer it the first another part of this kind of triangle is the employees sometimes the employees have actually frequently the employees have interests that are different from those of the owners different from those of the managers and different from the borough directors because remember the board of directors in theory represent shareholders but they also have their own interests which may the scandals of the 1990s and the early 2000s I've Illustrated board directors don't always effectively represent shareholders and then of course we have the government here on the outside who are setting the laws and the rules regarding how this relationship should work so it's a very complex relationship it's about managing the tension between five different sets of stakeholders now there's a couple of key documents that are designed to manage this relationship and the first some of you may have actually heard of already and that's the corporate charter fire rate that you fast feel free to rewind the video and so the corporate charter the corporate charter is a document issued by a state government not the federal government and it creates a corporation corporate charters just tell you everything you want to know in a very basic sense about a corporation what's the corporation's purpose what are the rights and duties of stockholders or owners what are the rights and duties of directors and one of the rights and duties of managers another key term regarding corporate governance is what we call fiduciary responsibilities I just talked about it just a little bit with regards to managers as trustees and fiduciary responsibilities is this duty for a representative to manage the property in the interest of the owner and we can look at that specifically as managers as trustees so managers run the firm in the interest of the owners and to an extent the Board of Directors also has that same degree of fiduciary responsibilities additionally in a corporate charter you see a discussion about the number and shares and of course classes of stock that we authorized are they going to be any dividends or not information about the annual shareholder meetings how big the board should be and if there's any procedures well not only if but what are the procedures for removing directors it also has the corporate charter what we call violets and bylaws are the rules of corporate governance adopted by corporations think of it as like all the amendments to the corporate charter and all the little details located in court which are now states compete pretty vigorously to attract corporations to incorporate in their specific states because there's an incorporation fee and corporations also have to pay their tax revenues to those states now the joke is Delaware is where more corporations are headquartered than any other state there's a joke that there are more corporations in Delaware than there are people in Delaware and you think well that must be because Delaware has a low incorporation fee and there's low corporate income tax none of that is it it's because time and time again when it comes to legal proceedings Delaware always tends to not really favor shareholders they tend to work in favor of directors and managers of the corporation other states have lower incorporation fees and lower taxes but it's Delaware that does the most to protect the management and the board directors of corporate corporations perhaps even to the detriment of the owners now the theoretical our relationship as I mentioned if we're looking at that triangle that I've drawn up a little bit earlier in this video theoretically federal and state regulation is the most important thing in corporate governance states of course generate the charters as a and they are reflective of federal regulation the shareholders because of the owners are really in charge they tell the Board of Directors what they want the Board of Directors tells the CEO when the shareholders want and the CEO just goes ahead and execute but what tends to happen more often though is that federal and state guidelines are you know the most important the states bring the individual charters the CEO has a powerful kind of personality who pushes around the Board of Directors dictates and execute the strategy maybe for the benefit of shareholders maybe not and so shareholders are actually the recipient of a CEO of action not the directors of CEO or managerial behavior historically it has been States that have been in charge of corporate governments laws but the Supreme Court has said that the Constitution empowers Congress to regulate corporations if it chooses and it has chosen a few times particularly with a lot of the crises that have stemmed from the late 1990s and also early to mid-2000s we'll talk about some of these crises in the next video I'll see you that