Identity, Ownership and The New Role of Cryptography

In Episode 29 I chat with Steven Boykey Sidley about his new book 'It's Mine'.

Identity, Ownership and The New Role of Cryptography

In Episode 29 I chat with Steven Boykey Sidley about his new book 'It's Mine'.

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In the age of AI is proof of personhood more important than anonymity?

In this episode of The Discussion I speak with Steven Boykey Sidley about cryptography, identity and ownership in the digital world.

We discuss privacy, anonymity and personhood in the digital age and the transformation around ownership thanks to crypto. We touch on the debate around central bank digital currencies (CBDCs) and the need for alternatives like stablecoins. We think about how people in emerging markets can protect against currency debasement and where tokenization and NFTs fit in.

Steven is Professor of Practice at the University of Johannesburg and the author of several books on cryptocurrency including “It’s Mine” ( and “Beyond Bitcoin” (

Tracey's book 'The Future of You: Can Your Identity Survive 21st Century Technology?' available in the UK ( and US (

Find Tracey or book her to speak at


Tracey Follows  0:20  

Welcome to The Future of You. This week I'm chatting with Steven Boykey Sidley, an expert in crypto-fueled innovation for what will be the penultimate episode this season. We're planning to come back at the start of 2024 with episodes that follow our usual format, well, for The Discussion anyway, of more than one guest per episode, as I continue to explore these identity-related issues that are emergent in the digital virtual worlds. There are some great ideas and guests planned so please tune in next year. In the meantime, I'm hoping to pull out some key themes over our past episodes with our 40-something odd guests and air those in the interim. But for now, we turn to Steven Boykey Sidley, Professor of Practice at the University of Johannesburg, a partner in Bridge capital, an M&A company and the author of seven books, including his latest one, entitled 'It's Mine'. And that is all about the emerging crypto space and the ways in which cryptography is going to transform ownership. Now, in this episode, we chat about his previous book 'Demystifying DeFi' which is brilliant by the way, on why he's moved on to this new territory of ownership, and we discuss the sovereign individual and the case or not for anonymity, stablecoins over CBDCs, Dows, decentralised, autonomous organisation, the importance of tokenization and the regulatory headwinds affecting crypto and a lot lot more. Not least, of course, the notion of owning yourself, which Steven refers to in his book as ground zero. So without further ado, here is Steven Boykey Sidley on identity, cryptography, and ownership.

So Steven, welcome to The Future of You. It's a delight to be able to speak to you. You know I'm a big fan of your books, and also your tweets, but you don't seem to be tweeting that much anymore. Maybe we can talk about that. So welcome.

Steven Boykey Sidley  2:23  

Thank you very much. And thank you for having me.

Tracey Follows  2:25  

Oh, no, not at all. I would say that I first encountered you when I was reading your book on DeFi. And until that point, it was all a complete mystery to me, because I mean, I knew a bit about it, but I I was thinking that all this language... I can't...  really it's impenetrable. And anyway, I read your book, and it was absolutely brilliant. I do believe that you have a special talent for making the complex simple or at least understandable. So why don't you tell me about that book that I read. And then how you've got to the new book called "It's Mine", and what the relationship is between the two? 

Steven Boykey Sidley  3:02  

Sure, so what happened was Covid, essentially. I had sort of fallen down one of the many rabbit holes of blockchain in about 2016, where I was CTO on one of the first blockchain projects in South Africa. And it immediately became apparent to me even at that time that this thing was laced with so much jargon, that it seemed an impossible thicket to get your way through, even if you were technically inclined. And I spent a lot of time trying to simplify to myself some of the concepts that underlie it. And like everything else, it's not particle physics, it's less jargon. But conceptually, none of the stuff is very difficult. Covid happens about 2020. And we all get locked down and in the country we are under now, which is South Africa, the lockdown was brutal. And sitting in the office every day and wondering, you know, am I gonna have to sit in this office for you know, the rest of my life and I made a call. At that stage I had started seeing that was happening with T-Fi. There was this explosion of applications, blockchain born applications which were mimicking and improving on what was done in traditional banks. So I called a friend of mine who was a blockchain expert, Simon Dingell. And I said, I think there is something going on here that will be of lasting interest to the world. And it has not been explained anywhere. There are no books on this, there was a bunch of techies who annoy everybody with their maximalism and their big words, and I think there's a chance to explain the stuff in a very sort of logical and simple form. And he said to me, 'well, I understand it, but I'm not really interested in writing a book' because he's building De-Fi projects. And I said 'That's perfect. I'll write the book. You check the chapters and make sure that we're on track' and that's the way it went. And so we attack this fairly wide field of DeFi which was everything from using smart contracts and blockchains to mimic debt instruments and credit instruments and currency instruments and payments instruments and try to explain this in a very logical step by step form. The book was picked up by a UK publisher and it did quite well worldwide. But as the book was being published, whereas I finished it in only 2021 And then it became apparent to me that something else was going on. And there were these creatures arising as if from a Cambrian swamp and the creatures which were getting up and torturing and upsetting established industries were not only DeFi it was obviously cryptocurrency starting with Bitcoin, but there were people paying absurd amounts of monies for small comm pixels. And that was NFTs. And people talking about game- fi and people talking about Web3 and people talking about metaverse, people talking about decentralised autonomous organisations. And I thought to myself, all the stuff going on here, what is the stuff all about? We've just gotten to grips with DeFi and now there's seven or eight other creatures which have emerged. And if one were to ask around for people who knew vaguely what was going on? What was the thing that the thread that pulled all of these creatures together? Most people would say the blockchain and it seems to me that was the incorrect answer. The incorrect answer is while all of these things are built on a foundation of cryptography, what the thread was, is it gives humans a new way to own things. What is at the root of all stuff is property ownership, a different way to earn currency, a different way, a way to financial journeys through the banking system, a different way to own your data on the internet, etc, etc, was all to do with ownership. And so I felt that there was an opportunity to write a book, which had ownership as its mens on top of all these things, which is more fun and more interesting and less technical and less jargon with a subject. And that was the subject of the new book.

Tracey Follows  7:01  

It's interesting, because the first guest on this podcast, well, the first two guests, really were Dave Birch and Richard Bartle. And Richard Bartle had said for a long time for many, many decades ago, probably now, he said, about virtual gaming worlds that it was about people buying things that don't exist from people who don't own them. And that's always been a brilliant quote. And it was true for a long time, I guess, because there wasn't the ownership infrastructure that you're talking about there. So what has changed that would make not Richard wrong at all, because he's never wrong, you know - think he's never wrong, but that actually gives us a chance of ownership in these non-physical spaces that are emerging.

Steven Boykey Sidley  7:46  

Yeah, so there's a little bit of a rewind that happened over here. And that has to do with the mathematics of secret keeping, which is called cryptography. And the mathematics of secret keeping changed in the mid 70s. And that's the only way for us to share a secret prior to that in the real world, if you have a lockbox is that you keep your secrets in the lockbox or your jewellery or your family heirlooms. And if somebody else wants to access to the locked box, they have to have the same key to the locked box. And what happened in the mid 70s was a technology arose called Private Asymmetric Cryptography and at the route of that was the problem that was sold is that you could now share a secret with each person had a different key. And that opened up a whole world of possibilities which have been impossible prior to that. It was based on a mathematical oddity. And there were a bunch of researchers who looked at this mathematical oddity and suddenly realised oh my god, you can now share a secret without sharing a key. This is a big deal philosophically. And that allowed the creation of a particular kernel thing which everybody's heard of called digital signature. And it's not the sort of digital signature where you sign your Adobe file with a digital signature and get passed around people. It's an unhackable proof that you are the owner. And not only that, it is also an unhackable means to keep the privacy. But the fact is, you are able to prove the owner of something without anybody attesting to it or appoitning you or saying you are the only... or taking custody of that document of ownership had never happened before. And I'll give you some beautiful examples of why we think we own things, when we don't really. 

If you're lucky enough to own a house, the title deed for your house sits at some governmental authority. And while you have a copy of the title deed, if there is a bad actor in the government authority who changes the title, you will never get that house and this has been exhibited in the most tragic way in Johannesburg recently where there was a building that caught fire and 500 people died and that building's title had been hijacked. And the original owner of the building could not get ownership back and maintenance gone to hell and the fight broke out and people died. There are 550 buildings in downtown Johannesburg, whose titles have been changed at the deeds office. Your car, you have a document in the car, equivalents of a document called a car registration certificate. That is held by some Traffic Authority. If somebody steals your call and has a friend in the Traffic Authority they can change the name of that. Your computer which you bought at your local store, you think you own it. But if you've lost the receipt for that thing, and that computer gets stolen, and your insurance company, you go to your insurance company, and say I want to get paid. now. They will say to you, well, how do we know the computer's yours? Please show us the receipt. I didn't keep the receipt from our computers. So your tether to ownership in the digital world and in the physical world is very, very tenuous. And what crypto tokenization has allowed us to do is to bind ourselves mathematically and irrevocably to something not only things not in the real world, but things in the world to wherein nobody, no bad actors, no thieves, no crooks or the bank can change that. The banking is the most obvious one. I mean, we've all had circumstances in which the bank has made a mistake, unfortunately, you could phone them up and you get the mistake fixed up even if you have to be on hold to the call centre for 20 minutes. But there are many, many cases worldwide where there are people within banks who are in collusion with criminals somewhere and things are changed on the ledger, and you can't undo it. And cryptography has taken all of that stuff and just removed it. What that has allowed us to do is create a mechanism of ownership with it or no third parties involved. You don't need a lawyer, you don't need the bank, you don't need an insurance company, you don't need a title deed company, you don't need any of that stuff. I say this flippantly because the legacy of title deeds or car registrations are embedded in a civilization or a society. And it takes a lot of undoing to change that. But if you look at Estonia or Singapore or one of those more advanced countries, that's beginning to happen at speed.

Tracey Follows  9:57  

Now in the book, you make some smart observations about privacy and whether we can own our own secrets (laughs). Tell me a bit about the chapter on privacy and the fear of anonymity. I think that's really intriguing.

Steven Boykey Sidley  12:22  

Ah, that was a fabulous find I made of an iconic, jovial and deeply knowledgeable mathematician by the name of David Chaum - Ch Au M. For my money. David Chaum is Satoshi. There's absolutely no question. Every single innovation that was in the Bitcoin paper was invented by David Chaum, he's an American. So David Chaum makes the following point: we have known how to encrypt things for a long time. And when you encrypt something via some encryption algorithm, it keeps it private to you because you can unencrypt it because you have the key. But he said that's completely different to anonymity. And he gives a fantastic example of what happened in one of the South American companies. It's in my book, I have forgotten it now excuse me, Chille or Argentina or one of the others. In which they were not able to... it was the old telephone system in the 60s... they were not able to hear the conversations, but they could trace by the behaviour and patterning of where calls were made, who had made the calls and in fact there was a coup as a consequence of that. That is when people were not able to stay anonymous. So anonymity and privacy are two different things. The government may allow you to keep certain things private to yourself, but they absolutely don't want you to be anonymous, because if you are anonymous, they can't trace you, track you, take money from you, tax you, all of that. And what  this private public key pair, which I talked about in asymmetric cryptography, does, it allows you to impose privacy at your discretion and anonymity, at your discretion via this digital signature. So they are two separate things, people sort of meld them together, but they are philosophically different. And the one that scares the government is not privacy. It's anonymity.

Tracey Follows  14:21  

Because people like Belaji have been talking about the pseudonymous economy for a long time, haven't they? So obviously, that's not anonymity. It's you having more than one plural pseudonyms, and actually, I guess owning different bits of information in different kinds of spaces, under a different name, presumably. But does it all come back to one individual? Because one of the things that is worrying people I think is that, and it's to this point on anonymity, with things like digital identities and ownership of digital assets in the metaverse or non physical spaces, whatever you want to call them. Is your identity going to be traced all along this, sort of, everything you do in these non physical spaces?  Because at the end of the day it has to all track back to something? Like some kind of unique digital identity. And then does that mean that anonymity is essentially impossible in any of these spaces?

Steven Boykey Sidley  15:21  

Yeah, so Tracy, when I did research for the book, and I wrote a chapter called Owning Yourself: Ground Zero. And it is largely informed by your work, your book, plus some of the work of other people, but yours was the main one. So obviously, this is an area that's near and dear to your heart. One of the things about digital identity and cryptography, it gives you the capability of creating many versions of yourself, which is what identity is. Identity is not your mother and father, it's not your birth certificates, your identity changes every second of the day, if you had a bad night, if you've got a hangover, your identity is different. What you show to your prospective mother in law is different to what you show to somebody who you want to get a job from. Your identity as a human being changed, as depending on who is the recipient of that identity and cryptography allows all of this to happen. When you say that is anonymity impossible. I would say under certain circumstances, it is very difficult to achieve that the proof of personhood is much more important than anonymity. Proof of being alive - the different words for proof of personhood. And in fact, if you take for example, what's happening in India with IG over there, it's called the Aadhaar programme. All you need is fingerprints and that means you are alive. And that means you can get an ID book. Now, of course, they do tie it to a person's name and ID number there. But proof of personhood in the age that we live in now becomes more critical than previously. And because of artificial intelligence, we want to know whether the thing that we're corresponding with it's a human or has a provenance of humanity, or has a provenance of AI for many, many reasons, copyrights and, and all sorts of all sorts of other things. And so the proof of personhood, in my mind, is more important than anonymity. Anonymity is dangerous, because anonymity allows avoidance of blame, which is what countries are worried about. If you are anonymous, and you do something bad, how it can we sanction you? Now we run into philosophical arguments about state control versus individual control over here, and you and I think for one are on one particular inside of that...

Tracey Follows  17:44  

Yeah, we might talk about chapter four of The Sovereign Individual next. 

Steven Boykey Sidley  17:48  

Exactly, exactly. But I think anonymity is absolutely achievable by the mathematics and appropriate in only some circumstances. Appropriate for a civilization that works together. It's appropriate only in some circumstances, it's not appropriate to be anonymous, or it's not wise to be anonymous. If you are committing crimes, it's wise for you. It's not wise for the victim on the other side. So governments tend to be very worried about anonymity.

Tracey Follows  18:19  

I mean, the argument that's always made, the counter argument is about whistleblowers, you know. So whistleblowers need anonymity so that they can actually tell the truth - back to the points about secrecy - to tell the truth about certain situations without obviously, disclose who they are. But presumably, within the systems you're talking about, that's possible anyway?

Steven Boykey Sidley  18:39  

Yeah, in fact, I'm just about to launch into a research project at the University of Johannesburg on this very thing, it's a whistleblower project.

Tracey Follows  18:46  

Oh Amazing. 

Steven Boykey Sidley  18:47  

Yeah. And what we're trying to do is have a whistleblower be able to come forward without revealing who they are, but also proving that they are the person who did the whistleblowing without giving their identity. And it has to do with multi signatures and all that sort of stuff. Unfortunately, once the stuff gets to court, the anonymity disappears, because the whistleblower needs to be identified with a person. But while the investigation is happening, you can hold it in anonymity because that person has been split into five or six different pieces, and put in a ring and not one of the investigators know who the person is. Only if all of them together, collaborate do they then find out who the person is.

Tracey Follows  19:31  

Oh, that's really fascinating. That is that's yeah, that will be groundbreaking. I haven't seen anybody looking at that before.

Steven Boykey Sidley  19:37  

Yeah, we have that's a very local problem over here because we have so much corruption over here, and so many good people as well, that the whistleblowers would like to come forward, but it's dangerous under this current circumstance. 

Tracey Follows  19:48  

Yeah but the way we're going that's very scalable, should we say? (laughs) What a scalable proposition. Let's talk about the sovereign individual actually, because you just hinted at that and that's kind of the philosophical concept of the sovereign individual. It's quite trendy at the moment to be a bit anti the sovereign individual and say that well everything's connected, and essentially, everything's a collective and it's difficult for one to sort of demarcate a sovereign individual. So is it just illusion? Tell me what your views on that.

Steven Boykey Sidley  20:23  

Yeah, so there is a chapter in the book called Sovereign Individual which starts off with a short summary of the famous book in which they wrote about this tension that exists between the aspirations of the individual to be autonomous, and the aspirations of the state to be connective. And there is, first of all, not only is there no answer to this problem, there is only a line drawing between those two extremes. So the far extreme you'll find libertarian anarchism, etc, etc. And the other side, you find communism and dictatorial and autocracies. And somewhere in the middle, where most of us live, at least you and I do, there is a certain amount of ways to stay autonomous. And there's a certain amount of ways that you will submit to government's intervention, both a government surveillance, for instance, you will submit a government surveillance for the government, perhaps to have cameras in high crime areas you may think is a good idea. But the sovereign individual - one only has to look at a toddler. And a toddler wants to be at a certain point, when they start separating from their mother or their parents. Autonomy becomes the most important thing and that's what the temper tantrums and are all about in your twos and threes, is trying to break free and be your own person. On the other side of this, I understand the need if you're going to have a society of cooperating individuals, you can't all be sovereign because you need to work within a framework. You know, the very small difference between Republicans and Democrats in the United States versus the very wide difference between the competence and the right wingers in Europe, is all arguments about the same thing. It's how much control does the individual have versus how much control to state here. And CBDCs central bank digital currencies are a horrifying prospect if you're a Chinese citizen, because that has got very little to do with immutability and decentralisation and speed of transfer and all this fancy blockchain stuff. It's got everything to do about surveillance of a citizen. So when your country or America says we're going to... we're thinking about instuituting a cbdc we promise we won't spy on you, or we promise we won't restrict what you can buy. We may believe them. But we have absolutely no government or maybe this government protects you, but the next government that comes in doesn't so....I'm very, very anti CBDC. And I hope the whole thing fails terribly. And we go the stablecoin route, which is global and censored.

Tracey Follows  22:54  

Hmm, very interesting. Let's dig into that then. See, Dave Birch I know says it's because obviously China are sort of trialing it, aren't they? And he says, well, China's always been at the forefront of innovations in money. And their experiment, I don't know how long he said maybe their 1000 year experiment, is over in paper money. And actually, this is back to them being very, very innovative. Tell me what it is. I think I know. But tell me what it is about CBDCs then that you think is so terrifying. Is it programmability?

Steven Boykey Sidley  23:29  

Yeah, so programmability. In fact, there are already examples out of China, in which certain citizens are sanctioned for some infraction and or suddenly find that they can't use public transport. That's the most obvious one, in fact, is a group of people that 1000s of them who've been banned from using public transport without being told why by the way. That was done via WeChat. Because WeChat is the payment instrument, which allows you to get on the subways, but it is much easier and much faster to do by CBDCs. And while there is a great deal of innovation that the Chinese have had, and this sort of thing. The innovation is in the surveillance pot they're innovating today innovating citizens surveillance and citizen repression in my view. They're not even, you know, secretive about this. They are completely open about this. They want to know what you're spending money on and if you're spending money on too many bottles of whiskey, you will no longer be able to use your CBDCs in liquor stores etc etc. There is an automatic break on CBDCs by the way, which is pleasing is that CBDCs are not transferable across countries. For the same reasons that foreign currencies are not transferable countries not without a great deal of difficulty anyway for x controls. Whereas stablecoins are and stablecoins is a much better solution to the good things that blockchain gives you. T+Zero settlements, the immutability in the counterfeit feasibility and all that stuff. And so, you know, there's already a backlash in the United States, mainly from the Republican side thinking that there will never be a CBDC because that gives the government. But there are stablecoins. And they, you know, bring the same advantages that CBDCs did.

Tracey Follows  25:13  

So I think in the UK, Rishi Sunak, well it must have been two years ago, he I think he passed the law, or I have to look back at it, but he was definitely promoting stablecoins and allowing them, sort of hoping that they will thrive alongside our fiat currency, I think, how will stablecoins come into the community? Will they be alongside fiats and yeah. Just describe to me what you think the ecosystem will be? How do they enter? And then how do they become more popular so that they do become the default option, let's say?

Steven Boykey Sidley  25:46  

Okay, so one of the tragedies, catastrophes, that have happened in many countries is mismanagement in the economy causes the currency to debase. So you know, if you're in Argentina, or Turkey, or Venezuela, you've lost 90 or 80, or 90% of your spending power, your global spending power for your fiat currency. In the last five years in Nigeria, it's been about 50%, the last five years in South Africa, it's been 50% in the last 10 years. Lots and lots of examples in this realm. It's tragic for the citizens of those countries, because everything that their buyers now build globally, cars, washing machines, whatever, get very rich. What the Nigerians have started to do, and by the way, 34% of Nigerians use cryptocurrency. Now, let's say take them to the Nigerian Bureau, which they get paid every week, they take just enough out to buy the bread and milk, and then they weaken supplies, and whatever. So this variable goes into us stablecoin, set by a local cryptocurrency market. It's legal, it's simple, and they are protected against the debasement of currencies. That turns out to be one of the single most important uses of stablecoins. If South Africans had moved all their hands over the past 10 years into USD C or Tether or one of the other dollar stablecoins. They would have not had the debasement of currency that they've seen. I'll give you a personal example I put some money into, it was a stablecoin, that was Bitcoin and Ether back in 2017. And after seeing myself get wealthier and wealthier, not having to do anything at all, because the Rand has gotten weaker and weaker. And obviously, we see Bitcoin and Ether have grown in value. So that is the one use case for emerging markets, there are a bunch of other use cases, the biggest use case of stablecoins is T+Zero settlement. You settle instantaneously, which you cannot do across borders. I'm talking about what you cannot do via the banks. It is the safety of it, there can't be hacked, there's no middleman, there's no bad actors or banks to steal your money, etc, etc. all the other things. I wanted to say a word about CBDCs, I wanted to rewind a bit. There will be, with absolute certainty, a country somewhere in the world, which lauds a CBDC. And it gets hacked by the North Koreans. And when that happens, you'll see everybody pulling back very quickly. Whereas stablecoins particularly Tether and USD C and some of the other ones have been out there for years and years and years and years. They're all completely hardened. The smart contract says no holes in them. There are no hackers who are going to punch through that stuff. But somebody who builds a new CBC under a government's authority, it's going to get hacked by somebody. And then you'll see this thing do a major pause. And people will say maybe we should go with something that's been working for the last 10 years.

Tracey Follows  28:34  

Do you think there's going to be a group of people who are just so anti all of this, they just kind of ended up living kind of off the grid really, and wanting to create their own local currencies or exchanges? Because so many people I'm coming across these days are so frightened by all of this... to the point about hacking because they don't necessarily discriminate between like a government-run CBDC and other crypto solutions. They just see it all as like digital solutions are vulnerable. And they actually want to sort of insure themselves against any of that and kind of build parallel communities.

Steven Boykey Sidley  29:10  

Yeah, so you threw out a line a couple of minutes ago Tracey where you talked about will these things exist in parallel with fiat and unquestionably there will, okay? There is only maximalists and in my view, only unrealistic maximalists that would see a world in which there is no government run money. Okay. Most people don't care about this stuff. So in my view, the advantages and wondrousness of blockchain currencies, blockchain payments will be a parallel system just like gold is a parallel system to dollars. Are there going to be a bunch of people and go off grid? Yes, but I don't rate their lives are going to be any better by doing that. We still have to live in a world and we have to live in a world where there are fractured philosophies, fractured political systems, fractured monetary systems. I happen to think the best of them will be the crypto system. But there is a portal between these two things. There will always be movements from one side to the other at this point.

Tracey Follows  30:14  

Okay, now let's talk about tokens and tokenization. How important are tokens?

Steven Boykey Sidley  30:20  

Okay, so this is the business I happen to be in now. I'm a consultant to a company of South Africa called, which is the first real world asset tokenisation company in the country. If you look at the most recent research reports from Boston Consulting Group from Citi Corp, and Galaxy and a couple of others, McKinsey, I think, the projections are that the tokenization of real world assets will be the biggest innovations in finance for the last couple of 1000 years. The reason is that banks will be moving $16 trillion of tokens of value over blockchains. By 2036, trillions is 10% of GDP. So these are just massive numbers, because it was zero and 2020, it's gonna go to 16 trillion by 2030. It'll be the fastest move of a new financial technology in history. The reasons that and this, by the way for your listeners is these tokens are not cryptocurrencies. They are simply tokens of ownership of some real world thing as share certificate, a debt instrument, a piece of gold, a piece of art. It's just a token, it's really an NFT by any other name. It is a killer use case for blockchains. Nobody had even seen this happening prior to about 2017. Where you take something in the real world and you give a token that secures your ownership rights over that thing. And your ownership rights can never be taken away because of the magic of cryptography. And so you'll find out I did some research for a competitive report that I wrote for this company. In 2019. There were no global banks doing anything with tokenization. And I looked at the 115 biggest banks in the world, there is nobody who is not doing something in tokenization. It is just an unbelievable tsunami. They can't find people. There are projects going out to blockchain, there are debt projects, there are Treasury projects, there are currency projects, there are credit projects, there are real estate projects. All these people are doing tokenization. The advantages, aside from the ones that I've given you, is the ability to fractionalize these things. One example for you. Let's say there was a shipping company who needs to ship a bunch of cars from Korea to South America. And the cost of that was $150 million. And they need to raise finance to move the cars from Korea to South America. So they go to Goldman Sachs and they say we've been doing this for, you know, 120 years, we're a shipping company, we need 100 million to move this cargo. Now, what happens in the old world is Goldman Sachs says, Sure, we'll give you that money, you're credit worthy, you've been doing this round for 150 years. They package that 100 million, and they sell it out to very sophisticated institutional investors. And they offer say, 10.3% for the next 10 years for this 100 million, because it's much better than you can give them back. The point about that story, which happens every day all the time in all the big banks in the world, is that you and I have no access to that deal. We can't get hold of that 10.3% because that is sold off to big players who are buying 50 million tranches or 100 million tranches. Tokenization lets you buy 100 grands worth of that deal. Tokenization allows those people to fractionalize those huge high finance low risk, high interest rate deals down to tiny, tiny pieces and sell it off to tiny investors like us so that we can also participate in those ivory towers which have been closed to us for so long.

Fascinating - so I've always thought I mean, you mentioned NFTs there, but I kind of never bought into the NFT craze. I always thought verifiable credentials were more important than NFTs. But maybe in a sense that credentials are just like tokens for the person.

Exactly. They're a type of deed of ownership to yourself and what I just talked about an RWA they're all NFTs of a type.

Tracey Follows  34:17  

Yeah, yeah, exactly. So the tokenization is a concept. Yeah.

Steven Boykey Sidley  34:22  

Right. And one of the sadder things about the media is that if you ask somebody what an NFT is, they think it's a bunch of pixels. They think it's an ape. But the concept of NFT is an unhackable title deed belonging to you giving you ownership rights over something.

Tracey Follows  34:36  

Yeah, exactly. And so talk about decentralised autonomous organisations a little bit then because these are tokens, but they're slightly different tokens on governance tokens, and I was with a company a couple of days ago and we were talking about this. And I think people think that these are interesting experiments that are kind of like niche. I don't think people are necessarily foreseeing that it could be transformative. For the governance of companies, I think it could be. But it probably needs to wait for another generation, I don't know, because we've got a lot of people at the top who aren't going anywhere at the minute. And they're sort of in charge of the governance of companies. But what was your view and vision around DAOs?

Steven Boykey Sidley  35:16  

Okay, so I'm gonna give you two answers to this Tracey. The first one is when one sets up the company today, in any way, shape, or form, small or big. There are a series of fictions that we are forced to believe in, and the fictions are we have to have documents for the corporation, okay, corporate documents, shareholder agreements, board of directors, agreements, and on and on and on. Anybody who's tried to set up a company by themselves, it's likely going to file them with the state doesn't have to be a corporation, if it's a partnership, or partnership documents. They've got to get lawyers to do it. And thsoe are all fictions. And those are all fictions that have been written by people in order to make it easier to build a community of common purpose in order to do business. These are the rules. And here are all the documents and everybody adheres to the rules. When you get down to the lower levels, nobody knows what's in the shareholder agreements. And usually at the top level, few people know what they are. What happened with DAOs  is that they said we don't need this stuff, these Delaware documents or whatever the equivalent is in the UK. If we want the rules of this community of purpose, and everybody buys in...I'm talking about buying in, in principle, not buying unnecessarily if money - buying in the principle that these are the rules of what we're going to do. They can have a token, which proves they have a voice in the company without us going through all of that stuff. Those rules may say there will be one token holder who is the boss, but they don't have to say any of that. So the example which illustrates this, the best and it's the one that's used most often is there are 500 copies of the American Constitution, handwritten copies. And they are in museums and private hands. And last year may have been the year before one of these comes up for sale. And from a private stockholder. And Sotheby's, I think it was Sotheby's, gets given the right to auction this off. And a bunch of very, very rich, very private people are going to bid on this thing. And there's a floor level of $30 or $40 million, I can't remember what it is. And some young kid takes a look at this crypto guy, a digital native. And he says, Well, you know what's going to happen, some rich guy is going to buy this copy of the American Constitution and they're going to put it in their basement or put it in their living room or put it in a warehouse. And nobody will ever get to see this and this should be public property. I think that we should buy it. When he says we he says I'm going to go out on Twitter and I'm going to tell everybody about this. By the way, the auction is five days away, says I'm going to tell everybody about this and I'm going to form a DAO. And anybody wants to put money in we'll give them an unhackable token saying how much money they put in, and we will raise money and we will buy the American Constitution. And we will put it someplace public. Now he raised $42 million in five days. And the point of the story is, there is no way to start a corporation or a partnership and raise that money in any less than months and months and months and months. The DAO gave it the ability to do that the DAO said what everybody's rights through the DAO said what they were going to do with the Constitution when they got it. They didn't win by the way somebody else outbid them at the end. But the ability to build a community of common purpose instantaneously, with completely anonymous people, people who are not known to each other, rather than going through these fictions of corporations and partnerships and limited liability companies represents a fairly transformative change to the way that community efforts are organised. And yes, it's very early days, but it's very powerful stuff.

Tracey Follows  39:03  

Yeah, I agree with you. I think sometimes people take the wrong lesson away from that constitution of DAO, then they think, Oh, it failed because it was a DAO. It failed because, my understanding is, because they publicised what their top top level was. You know, what their barriers are? They weren't going to pay any more than whatever. And they unfortunately, in doing this exposed what that was, so they lost a bit of negotiating power, but it was nothing to do with the structure that you've just outlined.

Steven Boykey Sidley  39:31  

It was a raising of $42million in five days into an organisation that was the thing.

Tracey Follows  39:36  

Yeah amazing. Yeah, yeah, exactly that. Yes, I think businesses that are used to having junior boards and things like that, and again, that's old ‘permission’ world, isn't it? You're allowed to play but only at this level, and it's a little bit patronising, really, and in a more permissionless world, then anybody can participate. And that is an interesting structure that allows people to participate that might have been blocked out or things like that before. What haven't we talked about that we need to talk about Steven for people to either understand where this is all going or you know why this concept of ownership is so important?

Steven Boykey Sidley  40:12  


Tracey Follows  40:13  


Steven Boykey Sidley  40:14  

Yup,  that's the big one because at the end of this story that I've told, which is full of sparkles and pixie dust, and admittedly early in its maturity curve, notwithstanding the obvious advantages of all these crypto futures I talked about earlier, there are headwinds. And those headwinds are... let me say they used to be hurricane force, and now they've dropped to Gale Force. They're not as impossible to surmount as they used to be. So the regulations come from two areas. The regulations come from governments, and they come from those who rely on government, which is big business. And they're all great colours of power, fed or threatened by the autonomy that is enabled by crypto. Some of the things one can understand their push back, which is the ability to cheat on taxes. So they're saying, Well, you know, you just put something in your private wallet, and then you're not going to pay your taxes, and we want to see what money you have, what assets you've got. All of that is true. Of course, it avoids the obvious question - people cheat on their taxes, even in the current regime. And if you've got enough money you do that very well. We all know what the statistics are of very, very rich people paying no taxes. But put that aside, they are valid concerns that governments have to get rid of the anonymous anonymity and privacy that's enabled by crypto. And they've pushed it very hard. The SEC in the United States has pushed back the hardest. They claiming that all the stock has to register with the SEC. SEC is an organisation which has good intent. They want to protect consumers from being ripped off. They took a look at crypto, they said a lot of people we got ripped off, they didn't get ripped off. And we've seen the FTX announcement this morning. So they've come up hard against the crypto industry, but that has quite recently started to fade. It's the best way I can do it. And it started to fade because people of the calibre of Larry Fink of Blackrock, his company manages 11-12 trillion in assets. It's almost the size of China's GDP, as his as he thinks that Bitcoin is the future, is a financial innovation. And he is going to invest his customers' money in Bitcoin amongst others. So when people like Larry Fink say this is a good thing. Then other people say, Well, wait a minute, if this guy really knows his stuff, he's one of the most senior conservative people in the entire financial industry. He likes the stuff, maybe we should start thinking again, or revisiting the narrative that we presented that this is all rubbish. Some of the anti crypto sentiments have come from a misreading of crime. So this statistics, and that only takes 10 seconds on Google to find this out. Is somewhere around 0.15% of all cryptocurrency transactions are used for illicit purposes. And one could see them because it's a public blockchain. That the FBI says that 5% of traditional money is used for illicit purposes. So crypto crime is a mere pimple on the bum of crime in the real world. However, regulations have heard this industry have hobbled it have caused a throttle in some areas. On the other hand, if I'm honest with myself, I think that Sam Bankman-Fried deserves his punishment. And I think that regulations are necessary in some circumstances, and this will level out eventually. But right now, it is the greatest headwind. Some of the other headwinds, which existed two years ago, like energy usage for proof of work, have just fallen away, because the energy has become more efficient. People are using green energy, they're putting their minds to the extreme waterfalls and volcanoes and rivers, you know, then that stuff was never a real hindrance. It's mainly the regulation now.

Tracey Follows  44:20  

Is there a particular country that is going to be at the vanguard of this then?

Steven Boykey Sidley  44:23  

Yeah, so the two that are at the vanguard, there's a spectrum of course in various countries completely banned, dont touch the stuff well put you in jail, and then on the other side, there are countries are saying free for all come pay with your cryptocurrency like El Salvador, and it remains to be seen, it seems to be quite successful right now. But the ones that are most progressive are Dubai and Switzerland. Coming up behind them Portugal, Singapore, England, the Law Commission of Wales, I think it's called the Law Commission of UK and Wales is on permanent retainer to your Parliaments to write reports, which are in fee to what become laws on all manner of subjects over hundreds of years. So your government sits in the law commission, this crypto stuff, we don't really understand what this is all about, and how do we legislate this stuff and please write us a paper. Which they went off and did over a period of six to eight months. And it is a work of art that makes grown men cry like myself, because it so beautifully understands why this stuff is important. And so UK will not be far behind. Because their papers written, it's now in the hands of government to be turned into law. I have been through the document, which does one very important thing. They have said in terms of English law, property law, there are only two things. It's called assets at rest and assets in motion. An asset at rest is your car, and an asset in motion is like a loan. Okay? There are two different things, the two different legislative piles of stuff, which are applied to the stuff. They said, that's no longer true. There's a third thing that's called a digital asset, it's not the same as an asset at rest and it's not the same as an asset at motion. It's a digital asset. Don't try to put round pegs into square holes. And nobody had ever said that before. A second thing they did, you're gonna love this, is these law reports, these reports which are in feats of policy, are done by very clever people who have read lots of books and at the end of the day uses this long list of research reports and books are things that they consulted with in order to come up with their findings. What did they have at the end of this? Hundreds of tweets? 

Tracey Follows  44:30  


Steven Boykey Sidley  44:35  

They reference tweets as the deep thinking in this area, which is absolutely true and must have taken a lot of courage to do that.

Tracey Follows  44:58  

Which brings me to my final question, Steven, why are you tweeting anymore? I used to follow you, well I still follow you on Twitter. But you havent said anything on Twitter for a while? Where are you? Are you in sort of like Discord rooms? Where are you?

Steven Boykey Sidley  46:59  

No, I'm not. I slowed down on the tweets because I got irritated with Elon Musk wanting to do a cage fight with Zuck.

Tracey Follows  47:08  

Oh that was ridiculous.

Steven Boykey Sidley  47:09  

So I'm not tweeting that much because the platform itself has become... You know, I wasn't in the hellhole of politics on Twitter, I was staying to my lane and staying to things that I like to do. But the place had become a little toxic to me with Musk. I've got an allergy to that guy, I don't know what it is maybe because he screams at his employees. Notwithstanding his great achievements, still. So I slowed down on that one. I will pick it up again just because you said they're not there anymore. I promise I'll start tweeting more.

Tracey Follows  47:45  

Well, I was wondering actually, since you say about Musk. Obviously he's got this ambition, or we never know, but there is a stated ambition to turn X into this super app. And obviously, payments are going to be a big part of that. And we've seen what he's been trying to do with subscriptions, etc. But presumably, there's going to be crypto, isn't it? So what's your prognosis or prediction for where crypto meets X?

Steven Boykey Sidley  48:14  

Yeah. So he's not the only one Apple is the other one. Everybody looks at WeChat and says that would be nice. And I think that's, you know, fixed his wanting ambition. In order to get a Brit or an American to go to one app and give all the colour to one organisation. I think most people find that a little bit distasteful. I don't believe X will be successful. If it is crypto will absolutely be a part of it, he said so. So there's going to be a big battle for the super app or the super financial app, you know, one of the two. And crypto is going to be a part of all of this because all of these guys understand where this stuff is heading, especially in 2023.

Tracey Follows  48:59  

Well, that's a good line to leave it on, I think. Thank you, Steven, it's been a pleasure to chat with you. I always follow your work because you are one of the people who goes out and makes the impenetrable, understandable. So I appreciate all of that. As I say until I picked up the DeFi book, which you know, people should go and get this new book It's Mine but they should also get the DeFi book as well because that was a real eye opener to me. And then what else should they go and read of yours? Steven, you can have the final word telling people where they need to go. 

Steven Boykey Sidley  49:32  

Oh well yes, please read my two books on crypto. And Id love it if somebody would buy one of my fiction books even though theyve aged slightly. I may get back to that one day. I set out about 10 years ago to win the Nobel Prize for Literature. That didn't happen but the books are quite fun.

Tracey Follows  49:49  

Brilliant to speak to you. Thanks very much. And I hope to see you soon.

Steven Boykey Sidley  49:52  

You too - and congratulations on all your awards and good stuff that's happening with the company. 

Tracey Follows  49:57  


Steven Boykey Sidley  49:58  

Thanks. Bye bye

Tracey Follows  50:05  

Thank you for listening to The Future of You hosted by me Tracey Follows. Check out the show notes for more info about the topics covered in this episode. Do like and subscribe wherever you listen to podcasts. And if you know someone you think will enjoy this episode, please do share it with them. Visit for more on the future of identity in a digital world and for the future of everything else. The Future of You podcast is produced by Big Tent Media.


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